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Gold rises 9% in August as weaker dollar and easing Fed bets lift demand

Spot gold jumped 1% to $4,397 per ounce on Friday, helped by softer US inflation that pushed back expectations for a September rate hike.

Reported · Written up by our desk · Precious Metals

Gold prices extended their winning run as expectations of a US Federal Reserve rate hike eased after recent economic data, while a weaker US dollar made the dollar priced metal more attractive to overseas buyers, according to LiveMint Markets.

Spot gold rose another 1% to $4,397 per ounce on Friday, putting the metal on track for a second straight weekly gain. The article said gold is up about 0.9% for the week and had earlier touched $4,450, its highest level in 10 weeks, after softer than expected US inflation.

LiveMint Markets cited commentary from Jateen Trivedi of LKP Securities, who linked the move to an improvement in sentiment for bullion following US CPI of 3.4% versus 3.5% expected. The piece said August gains now total 9%, positioning for the strongest monthly performance since a 13% jump in January, while gold remains 21.5% below its January all time high of $5,602.

The report also pointed to shifts in market pricing, noting money markets were assigning around a 35% chance of a Fed rate hike in September, down from 55% a week earlier, after a jobs report and inflation readings eased pressure to tighten. It added that a weaker dollar index, slipping below 99.6 and moving closer to a two month low of 95.53 set on August 7, typically supports gold by lowering the effective cost for buyers outside the US.

Latest closeGold $4,432.00 ▲1.6%|Dollar index 99.64 ▼0.3%

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