Gold Rises After Cooler US Inflation Data Weakens Dollar

Gold prices surged on Wednesday after US inflation data came in softer than expected. The cooler inflation reading weakened the US dollar and increased hopes that the Federal Reserve may not raise interest rates again as soon as October.

The Personal Consumption Expenditures (PCE) Price Index, a key inflation measure watched by the Federal Reserve, rose 0.3% in August after a downwardly revised 0.1% increase in July. The Commerce Department's Bureau of Economic Analysis said this on Wednesday.

Spot gold gained 0.7% to $4,209.71 per ounce as of 9:05 am ET (1305 GMT). US gold futures also moved higher, gaining 1.5% to $4,241.90 on Wednesday.