By Brijesh Patel
(Reuters) -Gold rose for a fourth straight session on Wednesday, supported by a weaker dollar and expectations that the reopening of the U.S. government and flow of economic data will strengthen bets for a Federal Reserve interest rate cut next month.
Spot gold added 0.2% to $4,133.99 per ounce by 0155 GMT, after hitting its highest since October 23 on Tuesday. U.S. gold futures for December delivery rose 0.6% to $4,140.10 per ounce.
“The dip in dollar has suited gold and silver, which have both been posting gains this week,” KCM Trade Chief Market Analyst Tim Waterer said.
“It appears that ‘normal service has resumed’ for gold, with the precious metal trading back above $4,100 while eyeing off targets further north should U.S. macro data continue to be supportive for additional monetary policy easing.”
The dollar index was hovering close to more than a one-week low, making gold more attractive for other currency holders. [USD/]
The U.S. Senate passed a deal on Monday to restore federal funding after a record-long shutdown that has disrupted food benefits for millions, left hundreds of thousands of federal workers unpaid, snarled air traffic, and delayed the release of government economic data.
Traders are pricing in a roughly 68% probability that the U.S. central bank will cut rates by 25 basis points next month, up from 64% in the previous session, according to CME Group’s FedWatch tool.
Non-yielding gold tends to do well in a low-interest-rate environment and during economic uncertainties.
Fed Governor Stephen Miran said on Monday a 50-bps rate cut would be appropriate for December, noting that inflation is falling while the unemployment rate is drifting higher.
SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.41% to 1,046.36 metric tons on Tuesday from 1,042.06 tons on Monday.
Elsewhere, spot silver firmed 0.2% to $51.33 per ounce, platinum was steady at $1,588.10 and palladium eased 0.3% to $1,439.43.
(Reporting by Brijesh Patel in Bengaluru; Editing by Sumana Nandy and Rashmi Aich)
