Gold: hits new record and aims for $2,600 an ounce
Gold rises above $2,560 the ounce and aiming for 2,600setting a new record on the back of a weaker dollar and lower bond yields. The rise followed fresh macro data that raised expectations of more aggressive action from the Fed when it cuts interest rates next week. Initial jobless claims in the United States increased compared to the previous week and remained above average, signaling a weakening labor marketas evidenced by weak August payroll data.
Meanwhile, US producer prices rose slightly more than expected in August due to higher service costs, but the overall trend still pointed an easing of inflation. Markets now expect a 59% chance of a 25 basis point cut and a 41% chance of a 50 basis point cut, according to the CME FedWatch tool. In Europe, the ECB cut rates by 25 points as expected, reflecting growing confidence among policymakers that inflation is on a steady downward path.
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