As good an explanation as any......

As good an explanation as any...
http://au.investing.com/news/commod...wer-dollar-on-fed-rate-hike-uncertainty-43786
© Reuters. PRECIOUS-Gold benefits from lower dollar on Fed rate hike uncertainty

* Lower European shares help gold's ascent

* GRAPHIC-2016 asset returns: http://reut.rs/1WAiOSC (Updates throughout, LONDON dateline)

By Clara Denina

LONDON, Oct 19 (Reuters) - Gold rose on Wednesday as the dollar weakened and Treasury yields ticked lower amid uncertainty around the timing of a U.S. rate increase.

Spot gold XAU= gained 0.6 percent to $1,270.11 an ounce at 0944 GMT. U.S. gold futuresGCcv1 rose $9 to $1,271.80 an ounce.

Spot prices had shed about 7 percent over the past three weeks, as markets re-priced the likelihood of a Federal Reserve's rate hike in December.

The metal is highly sensitive to rising rates, which lift the opportunity cost of holding non-yielding assets.

However, a retreat in the dollar, which fell 0.3 percent against a basket of six main currencies after U.S. consumer prices showed a moderation in underlying inflation, prompted markets to trim bets on a December Federal Reserve rate hike. FRX/

Fed fund futures 0#FF: imply around a 65 percent probability of the Federal Reserve raising interest rates by December, down from 70 percent before the CPI data.

"The market is keeping an eye on the potential rate hike in December, which we don't expect because once we get close to the meeting, the Fed will see that key figures are not doing well enough to justify another rate hike and there will be some support for gold," said Danske Bank senior analyst Jens Pedersen.

A European Central Bank's policy meeting on Thursday will also be monitored by markets, Pedersen said.

The metal was also benefiting from lower European shares, indicating waning investor appetite for risk. .EU

"We remain relatively negative on gold short term despite a stronger start to the week," INTL FCStone said in a note.

"We expect further dollar strengthening going into Q4 on account of an election victory for Hillary Clinton along with the likelihood of a Fed rate hike."

Spot silver XAG= rose 0.6 percent to $17.66 an ounce.

Platinum XPT= rose 0.3 percent to $947.50 an ounce and palladium XPD= gained 0.6 percent to $642.40 an ounce.