(Bloomberg) -- Gold rose for a third day as traders shifted their focus to key US inflation reports due this week that may shape expectations ahead of the Federal Reserve’s final interest-rate decision of the year.
The three-day advance helped bullion break its recent tight range after declining in November following Donald Trump’s decisive election win, which boosted the US dollar.
Data on Wednesday and Thursday will offer Fed officials a final look at the inflation environment ahead of their policy meeting next week. Any sign that progress has stalled in taming price gains could hinder the chances of a reduction, although swap markets are already pricing in a nearly 90% chance of a 25-basis-point cut. Higher borrowing costs are typically a negative for bullion, as it doesn’t pay interest.
Expectations of more central bank purchases after China’s first buying of bullion after a seven-month hiatus also kept discretionary traders in bullish wagers on the precious metal. Geopolitical concerns continued to boost haven demand on fears of a power vacuum in Syria after Bashar Al-Assad was toppled from power over the weekend.
Apart from the Fed’s meeting, metals investors are also looking to China’s Central Economic Work Conference, said to be held on Wednesday and Thursday. The annual meeting sets the policy direction for the year ahead, and although it doesn’t usually contain specifics, there could be signals on growth and the economic recovery.
Spot gold rose 1% to $2,687.76 an ounce as of 10:31 a.m. in New York. The Bloomberg Dollar Spot Index was up 0.3%. Silver gained while platinum and palladium fell.
Among industrial metals, copper was essentially flat on the London Metal Exchange after rallying 1.2% on Monday as China’s top leadership made bold pledges to revive economic growth. Zinc edged higher and aluminum rose 0.8% on Tuesday. Nickel fell 1.8%.
--With assistance from Mark Burton and Sybilla Gross.