Investing.com - Gold prices rose sharply in North American trade on Tuesday, reapproaching the strongest level since March 2014 as investors continued to push back expectations of a rate hike from the Federal Reserve in the next few months.
Gold for December delivery on the Comex division of the New York Mercantile Exchange jumped to an intraday peak of $1,370.15 a troy ounce, the most since July 11, when prices surged to a more than two-year high of $1,377.50. It was last at $1,369.75 by 12:45GMT, or 8:45AM ET, up $10.15, or 0.75%.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, sank to a daily low of 95.25, a level not seen since June 24. It last stood at 95.30 early on Tuesday, down nearly 0.5% on the day.
The dollar has been under heavy selling pressure in recent sessions amid waning expectations that the Federal Reserve will raise interest rates anytime soon after data showed the U.S. economy grew much slower than expected in the second quarter.
Fed funds futures are currently pricing in just an 15% chance of a rate hike by September. December odds were at around 41%, compared to 53% at the start of last week.
Gold is sensitive to moves in U.S. rates. A gradual path to higher rates is seen as less of a threat to gold prices than a swift series of increases.
For the year, prices of the yellow metal are up nearly 26%, boosted by concerns over global growth and expectations of monetary stimulus.
Also on the Comex, silver futures for September delivery rallied 26.5 cents, or 1.28%, to trade at $20.76 a troy ounce during morning hours in New York, while copper futures tacked on 1.8 cents, or 0.84%, to $2.218 a pound.