Gold Prices Rise as Softer US Inflation Reduces Rate Hike Bets

Gold prices rose by 0.5% to $4,175.19 an ounce on Thursday as softer US inflation data reduced expectations of another Federal Reserve rate increase in October.

The Personal Consumption Expenditures price index, the Fed's preferred inflation gauge, rose 0.3% from the previous month, while core PCE inflation increased 0.2%. The annual headline PCE inflation rose to 3.4%, and core PCE inflation rose to 3%.

Markets had been pricing in a 38% probability of a rate hike in October, down from 45% before the data. However, expectations for a December increase remained elevated at 97%.

The US dollar's strength limited gold's gains, as it makes the metal more expensive for buyers using other currencies.