Gold climbs as dollar eases, investors eye key inflation data
Gold fell to its lowest since Nov. 18 on Tuesday
US PCE data due at 1500 GMT
US dollar down 0.8%, hits 1-week low
Updates with U.S. morning hours
By Sherin Elizabeth Varghese and Anushree Mukherjee
Nov 27 (Reuters) -Gold prices rebounded on Wednesday from a more than one-week low hit in the last session, supported by a softer dollar, even as easing geopolitical tensions, which would typically dampen gold's safe-haven appeal, failed to curb its momentum.
Spot gold XAU= jumped 0.7% to $2,651.27 per ounce, as of 09:13 a.m. ET (1413 GMT). U.S. gold futures GCv1 rose 1.1% to $2,650.30.
The rebound followed a dramatic $100 plunge on Monday, marking gold's sharpest one-day drop in over five months, as safe-haven demand waned following the announcement of a long-negotiated ceasefire between Israel and Lebanon's Iran-backed Hezbollah.
Prices fell to their lowest level since Nov. 18 in the previous session.
"It appears as if the effect of a softer U.S. dollar has been supporting gold prices in today’s session," said Hamad Hussain, Assistant Climate and Commodities Economist at Capital Economics.
The dollar index .DXY slipped 0.8%, hitting a 1-week low boosting gold's appeal for holders of other currencies. USD/
"Taking a step back from today’s price movements, greater volatility could be in store for gold prices in the near term ahead of Donald Trump’s inauguration and as the situation in the Middle East develops."
U.S. president-elect Donald Trump on Monday pledged to slap tariffs on Canada, Mexico and China, the United States' three largest trading partners, leaving investors cautious.
There was uncertainty about the direction of the economy, as noted by Fed officials in the minutes released on Tuesday.
Investors are now watching closely for core PCE figures due at 1500 GMT.
A weekly report on jobless claims showed many laid-off workers are experiencing long bouts of joblessness, keeping the door open to another interest rate cut from the Federal Reserve in December.
Markets now see a 67% chance of a quarter-point rate cut in December. The non-yielding bullion tends to shine in a lower-interest-rate environment. FEDWATCH
Spot silver XAG= rose 0.2% to $30.47 per ounce, platinum XPT= added 0.3% to $930.75 and palladium XPD= was steady at $977.54.
Spot gold price in USD per oz https://reut.rs/3Oq5keG
Reporting by Sherin Elizabeth Varghese, Anushree Mukherjee in Bengaluru; Editing by Alexandra Hudson
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