Gold prices received a boost after the US reported a softer-than-expected CPI print for October, triggering speculations that the US rate cut might come sooner than earlier priced in by investors.
Precious metal prices rose to a more than one-week high with spot gold inching up 0.5 percent at $1,971.60 per ounce in early trading hours on Wednesday, its highest since November 7.
US gold futures also gained 0.5 percent to $1,976.10.
“Fed swaps reveal the possibility of another interest rate hike has tumbled close to zero following the CPI announcement. Instead, markets appear to be pricing in a 50-bps rate cut by July,” Vijay Valecha, Chief Investment Officer at Century Financial, said.
Analysts expect an uptick in investment demand for bullion as investors broadly expect the Federal Reserve to have finished tightening monetary policy this year.
Lower US interest rates make non-yielding gold more attractive. Investors now await US retail sales and producer price figures due at 1330 GMT.
Economists polled by Reuters are forecasting producer prices rose 0.1 percent last month, compared with a 0.5 percent increase in September.
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