Gold hits week-high amid expectations of US interest rate cut

Gold prices rose on Wednesday to their highest level in more than a week as the dollar and US Treasury bond yields fell after data on declining inflation raised bets that a cut in US interest rates may happen sooner than investors expected.

According to Reuters, gold rose in spot transactions by 0.4% to $1,970.45 per ounce by 1224 GMT, after earlier touching its highest level since November 7. US gold futures increased 0.4% to $1,974.70 per ounce.

Traders are now awaiting data on US retail sales and the producer price index, scheduled to be released at 1330 GMT.

Data on Tuesday showed that the US consumer price index was unchanged in October, and the annual rise in core inflation was the lowest in two years.

The dollar fell to its lowest level in more than two months after the release of consumer price index data, and ten-year US Treasury bond yields also fell to their lowest level since September 22.

A lower dollar makes gold less expensive for holders of other currencies.