Gold Rises as Softer US Inflation Reduces October Rate Hike Bets

Gold prices rose on Thursday after the release of a softer-than-expected US inflation report. The data showed that US inflation rose less than expected in August, while price pressures were revised lower for the prior month.

The inflation numbers reduced expectations of a Federal Reserve rate hike in October, with markets pricing in a 36% chance, down from 45% before the release. However, traders still see an 89% probability of an increase in December.

Spot gold gained 0.8% to $4,187.43 per ounce by 0625 GMT, starting the month on a positive note after a more than 6% fall in September. US gold futures for December delivery firmed 0.7% to $4,217.50.