Gold Price Unfazed by Inflation Data Supporting Rate Hike Bets

The gold market remained relatively unchanged on Friday despite inflation data that supported expectations of an interest rate hike by the Federal Reserve next week.

The Labor Department's Bureau of Labor Statistics reported a Consumer Price Index (CPI) rise of 3.4% in August, matching economists' forecasts and increasing hopes for a rate increase.

U.S. gasoline prices jumped 3.9%, accounting for more than a third of the CPI increase over the month, while other motor fuels saw significant gains as well.

Traders now price in an 87% chance of a rate hike at the Fed's policy meeting next week, up from 67% before the inflation data was released.

Despite this, some analysts caution that Fed members may not be as decisive, with doves on the committee arguing for patience due to the recent dip in annual core inflation.