Gold rebounds as dollar weakens ahead of key US inflation data
Gold fell to its lowest since Nov. 18 on Tuesday
US PCE data due at 1500 GMT
Markets add to bets of a December Fed rate cut
Updates with mid-session trading
By Rahul Paswan
Nov 27 (Reuters) -Gold prices rebounded on Wednesday, after hitting a more than one-week low in the previous session, as the dollar weakened, while traders awaited key inflation data to gain insights into the Federal Reserve's potential path for rate cuts.
Spot gold XAU= was up 0.6% at $2,646.25 per ounce as of 1128 GMT. U.S. gold futures GCv1 rose 0.9% to $2,645.80.
Gold registered its deepest one-day decline in more than five months on Monday, and hit its lowest since Nov. 18 in the previous session, as safe-haven demand for the metal softened after Israel agreed to a ceasefire deal with Lebanon.
"The moderating U.S. dollar is helping gold extend its slight recovery following the steep declines at the onset of the week," said Exinity Group Chief Market Analyst Han Tan.
The dollar index .DXY slipped 0.5%, boosting gold's appeal for holders of other currencies. USD/
"Markets are also wading back in with bets for a Fed rate cut in December, with such restored odds offering some lift to bullion prices," Tan said.
There was uncertainty about the direction of the economy, as noted by Fed officials in the minutes released on Tuesday, and the markets slightly increased their bets on a December rate cut following the release.
Markets now see a 66% chance of a quarter-point rate cut, as per the CME group's FedWatch tool, compared with 55.7% earlier this week. The non-yielding bullion tends to shine in a lower-interest-rate environment.
"Those odds may be influenced by today's incoming U.S. economic data, especially the PCE prints," said Tan.
Investors are now watching out for core PCE figures, initial jobless claims, and GDP (first revision), all due later in the day.
On the physical side, a drop in gold prices this month has drawn in buyers of the metal who had been waiting for the market's lightning rally this year to subside.
Spot silver XAG= fell 0.1% to $30.40 per ounce, platinum XPT= added 0.1% to $928.95 and palladium XPD= was up 0.3% at $979.96.
Spot gold price in USD per oz https://reut.rs/3CJGrYJ
Reporting by Rahul Paswan in Bengaluru; Editing by Sherry Jacob-Phillips and Shreya Biswas
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