Gold rises to $1,750 due to US CPI decline

Gold prices rose because signs of inflation slowing in the US raised hopes that the Federal Reserve would slow down its pace of interest rate hikes in the coming months. At the moment, gold prices are at a 2.5-month high.

Metal markets were supported by a rather soft CPI inflation. Expectations for a smaller Fed rate hike also rose sharply. Investing.com reports that US CPI rose 7.7% in October, the slowest pace in nine months.

Last week, markets put the likelihood of a 50 basis point Fed hike in December at 47%.However, now markets believe that this probability is much higher, at 85%.

The United States currency fell to its weakest level in three months. The 10-year US Treasury yields also fell below 4%, hitting a one-month low. The fall in the dollar and Treasury yields pushed bullion prices up. It served greatly to bullion prices that have already suffered this year due to an increase in the opportunity cost of holding non-revenue assets.

Even though US inflation showed signs of slowing in October, price pressures remained above the 2% target set by the Fed. There is a possibility that this could lead to a further increase in the interest rate.