Gold goes up as greenback crashes on reduced Fed rate lift bets
On Tuesday, gold prices went up during European trade, extending revenues from the prior session as dismal American economic data tempered hopes for a near-term interest rate lift by the Federal Reserve, thus weighing on the greenback.
In New York, December delivery gold futures gained 0.54%, trading at $1,354.75 per troy ounce.
Yesterday, gold soared 0.32%, after data revealed the New York Federal Reserve’s index of manufacturing conditions suddenly contracted in August, thus raising worries over the strength of third-quarter economic growth.
The downbeat report led investors to push back hopes for the next American rate lift. Fed funds futures are currently pricing in about a 9% probability of a rate lift by September. As for December odds, they were at around 42%.
The greenback’s weakness normally benefits gold, because it boosts the precious metal's appeal as an alternative asset and also makes dollar-priced commodities more affordable for holders of other currencies.