Gold pierces key technical level amid US rate hike uncertainty

NEW YORK/LONDON — Gold rose to a twoweek high on Wednesday, gaining for the third straight session and breaching the 200-day moving average amid uncertainty over the timing of a US interest rate increase and ahead of the final US presidential debate.

Spot gold was up 0.50% at $ 1,268.44 an ounce by 2:27 p.m. EDT (1827 GMT), after touching its highest since Oct. 5 at $1,273.34. US gold futures settled up 0.60% at $1,269.90.

Spot prices had fallen about 7% over the past three weeks, as markets re- priced the likelihood of a Federal Reserve rate increase in December.

“Technically, gold is well supported above $1,250 an ounce… today’s push in the $1,270 area is a positive signal ahead of the US elections and the possible Fed rate hike in December,” ActivTrades Chief Analyst Carlo Alberto De Casa said.

The metal is highly sensitive to rising rates, which lift the opportunity cost of holding nonyielding assets.

“Since (Fed Chair) Janet Yellen’s speech last Friday, there is the growing view, which I think is the right view, that the Fed is going to move very slowly. The market has discounted a December rate hike,” said Bill O’Neill, cofounder of LOGIC Advisors.

The third and final US presidential debate between Donald Trump and Hillary Clinton starts at 9 p.m. ET (0100 GMT) on Wednesday.

“The uncertainty that brings about is a little supportive,” Mr. O’Neill added.

Fed fund futures imply a 65% probability of the Fed raising interest rates by December, down from 70%. The change was seen after US consumer prices data on Tuesday showed a moderation in underlying inflation.

The dollar turned up slightly against a basket of six main currencies, as Wednesday data pointed to sustained housing market strength.

Among other precious metals, spot silver was up 0.20% at $17.63 an ounce and platinum rose 0.20% to $943, while palladium fell 0.30% to $636.50. —