Gold Prices Rise as Soft US Inflation Report Dims Rate Hike Chances

Gold prices rose on Thursday as a softer-than-expected US inflation report lowered expectations of a Federal Reserve rate hike in October. Spot gold was up 0.6% to $4,183.22 per ounce by 1151 GMT.

The 10-year Treasury yields scaled their highest level in more than two decades, raising the opportunity cost of holding gold. However, 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.

Data on Wednesday showed US inflation rose less than expected in August, with price pressures revised lower for the prior month. This reduced expectations of a rate hike in October, with markets pricing in a 37% chance, down from 45% before the release.