Gold Price Jumps on Soft US Inflation Data, Rate Hike Expectations Ease
The gold price started October on a positive note after a decline in September. Spot gold rose to $4,183.22 per ounce, up 0.6% from the previous day. The rise in gold prices was partly due to softer-than-expected US inflation data, which reduced expectations of a Federal Reserve rate hike in October.
Nitesh Shah, commodity strategist at WisdomTree, said that yesterday's inflation numbers were helpful for gold as they weren't as strong as the market had expected. This led to a decrease in expectations for rate hikes, making gold a more attractive option as an anti-fragile hedge.
Rising Treasury yields and a stronger dollar, however, limited further gains in gold prices. The 10-year Treasury yield scaled its highest level in over two decades, increasing the opportunity cost of holding gold.