Gold prices perch at 6-month high as Fed pause bets grow

investing.com:

Investing.com-- Gold prices rose slightly in Asian trade on Tuesday, sticking to a six-month high amid growing bets that the Federal Reserve will not raise interest rates any further.

Anticipation of a slew of economic readings this week also kept safe haven demand for the yellow metal upbeat, as markets awaited more signs of cooling U.S. economic growth and a stalling Chinese rebound. 

The dollar sank to three-month lows in overnight trade, benefiting gold and other metal prices on bets of no more Fed rate hikes. But the greenback somewhat steadied in Asian trade, with more Fed cues also on tap this week.

Spot gold was flat around $2,015.57 an ounce, while gold futures expiring in December rose 0.2% to $2,015.35 an ounce by 00:18 ET (05:18 GMT). Both instruments were at their highest level since mid-May. 

Markets were now awaiting key economic readings this week, chiefly the PCE price index — the Fed’s preferred inflation gauge. Beyond that, U.S. PMIs for November, coupled with a revised reading on third-quarter GDP were also on tap later in the week.

Any signs of a cooling U.S. economy gives the Fed less headroom to maintain higher rates for longer- a scenario that benefits gold prices. Fears of worsening global economic conditions are also likely to drive safe haven flows into the metal.

Later on Tuesday, a string of Fed officials, including Christopher Waller and Michelle Bowman are set to speak, potentially offering up more cues on monetary policy before the pre-Fed meeting blackout period begins. 

The central bank is now widely expected to keep rates on hold in December, with markets now seeking more cues on when the bank plans to begin trimming rates in 2024. 

Any changes to the Fed’s higher-for-longer outlook are