December gold futures rose $7.90, or 0.6%, to $1,270.90 a troy ounce, a two-week high on the Comex division of the New York Mercantile Exchange. The futures price traded within a daily range of $1,261.10 and $1,274.40.
Silver prices also advanced modestly, reaching their highest level since October 5. The December futures price climbed 4 cents, or 0.2%, to $17.68 a troy ounce.
On Wednesday, China reported that its economy expanded 6.7% year-over-year in the third quarter, following two quarters of identical growth. Beijing also reported improvements in retail sales and fixed-asset investment for the month of September. Meanwhile, industrial production rose at a slower rate.
A range-bound US dollar kept precious metals supported in mid-week trading. The US dollar index, which tracks the greenback against a basket of other major currencies, traded flat at 97.87. It was down as much as 0.3% earlier in the day.
Gold’s short-term upside remains limited by expectations of an imminent rate hike by the US Federal Reserve. Gold is highly sensitive to moves in US interest rates, which increase the opportunity cost of holding non-yielding assets. The 30-day Fed Fund futures rates, which allow traders to bet on monetary policy, imply a nearly 70% likelihood of a December liftoff. The chance of a November rate increase is much less than 10%.
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