Gold Defies Stronger Greenback on Softer Inflation and Lower Yields
Gold prices have been on the rise despite the US Dollar surging to its highest level in recent weeks. This unexpected trend can be attributed to the decline in US Treasury yields following softer inflation data, which has reduced expectations of a rate hike by the Federal Reserve (Fed) at their October meeting.
The Core Personal Consumption Expenditures (PCE) Price Index, the Fed's preferred measure of inflation, remained unchanged at 3.4% year-over-year in September, below forecasts of a 3.3% jump. As a result, money markets have shifted towards a near 70% chance of an interest rate hold and an 83% probability for a December rate hike.
Meanwhile, the US Dollar Index (DXY) has risen by 0.61% to 102.08. However, this rally in the greenback has not been enough to suppress gold prices, which have gained over 0.40% to reach $4,175.