By Seher Dareen
(Reuters) – Gold prices climbed to their highest in about a month on Thursday on a weaker dollar after U.S. inflation data raised investor hopes that the Federal Reserve would soon stop tightening its monetary policy.
Spot gold rose 0.2% to $1,959.94 per ounce by 0918 GMT, its highest since June 16. U.S. gold futures rose 0.1% to $1,964.40.
The dollar slid to its lowest in nearly a year, boosting bullion by making it more affordable to holders of other currencies. Benchmark U.S. yields were also at their lowest in over a week, reducing the opportunity cost of holding non-yielding bullion. [US/][USD/]
With two weeks left for the Fed’s next meeting and data showing that fewer jobs were being added and inflation was slowing in June, there are expectations that the next rate hike could be the last, said Carlo Alberto De Casa, external analyst at Kinesis Money.
U.S. consumer prices rose modestly in June and registered their smallest annual increase in more than two years as inflation continued to subside.
Investors’ focus turns on Thursday to initial jobless claims for the week of July 6 (250,000 expected versus 248,000 the prior week) and June’s producer price index data.
Gold was struggling around the $1,960 resistance level and a break through key levels of around $1,980 and $2,000 could indicate that it is back in bullish territory, “although the price may face some resistance in the interim,” Craig Erlam, senior markets analyst at OANDA, said in a note.
In the wider markets, European shares edged higher and Britain’s economy contracted less than expected in May, yet weak trade data from China kept a lid on sentiment, while most base metals gained. [MET/L]
Among other precious metals, spot silver rose 0.3% to $24.22 per ounce, platinum jumped 1.4% to $960.04 while palladium gained 1.1% to $1,296.25.
(Reporting by Seher Dareen in Bengaluru; Editing by Emelia Sithole-Matarise)
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