MANTHANTIPS:- Gold jumps 1% as investors reassess Fed rate hike outlook
Gold prices rose sharply in European trade on Wednesday, extending gains from the prior session as investors reevaluated the likelihood that the Federal Reserve will raise interest rates this year. Gold for December delivery on the Comex division of the New York Mercantile Exchange touched an intraday peak of $1,361.50 a troy ounce. It was last at $1,360.25 by 06:58GMT, or 2:58AM ET, up $13.55, or 1.01%. A day earlier, gold tacked on $5.40, or 0.4%, after disappointing U.S. economic dataprompted market players to push back expectations for the next U.S. rate hike, weighing on the dollar. The Labor Department said nonfarm business sector labor productivity fell 0.5% in the second quarter, extending the longest decline since 1979. The downbeat data lessened the threat of an early interest rate rise from the Federal Reserve. Fed funds futures prices showed traders now see a 40% chance of a U.S. rate hike by December, according to CME Group’s (NASDAQ:CME) Fed Watch tool. That compares with around 50% ahead of the report. September odds were at around 15% early on Wednesday, down from 20% a day earlier.