Gold prices staged a recovery on Thursday after a sharp selloff triggered by unexpectedly high U.S. inflation data. The latest figures from the Bureau of Labor Statistics showed the consumer price index rose 0.6% month-on-month in September, its fastest increase since April. This surge in inflation raised concerns that the Federal Reserve may need to keep raising interest rates to cool down the economy, which led to a selloff in gold earlier in the week.
By Thursday evening, gold futures had climbed 1% to $4,146.48 an ounce, while spot gold gained 1.5% to $4,167.75. Silver also rebounded, with futures rising 1% to $56.1965 an ounce and spot silver climbing 0.8% to $1,615.52. Meanwhile, platinum futures advanced 1.3% to $1,110.52, while the U.S. Dollar Index fell 0.5% to 102.09.
The inflation data prompted investors to increase the likelihood of a Fed rate hike at its October meeting to around 30%. Federal Reserve Bank of Chicago President Austan Goolsbee described the latest inflation figures as discouraging, noting that rising energy costs and investments in artificial intelligence were contributing to economic overheating. He cautioned that it was still too early to determine if interest rates were high enough to bring inflation back to the Fed's 2% target.
Investors are now awaiting further guidance from Federal Reserve Chair Kevin Warsh, who is scheduled to speak late Thursday at the International Monetary Fund meetings in Bangkok. Despite the recent correction, Rick Kanda of The Gold Bullion Company suggested that gold's future performance will depend on central-bank demand, interest rates, the dollar's strength, and investor appetite for safe-haven assets.