Gold Sees Gains as Fed Rate Hike Bets Cool Amid Softer Inflation

Gold prices kicked off October on the right foot, rising to as high as $4,175.19 per ounce in premarket hours on Thursday, after softer-than-expected US inflation data tempered forecasts for another US Federal Reserve interest rate hike this month.

The Personal Consumption Expenditures (PCE) price index, the Fed's preferred inflation gauge, rose 0.3% in August from July and 3.4% from a year earlier. The monthly increase was below the 0.4% rise economists had expected.

However, elevated US Treasury yields continued to limit gains in the precious metal. The US 10-year Treasury yield climbed to about 5.30%, its highest level since June 2002, making it more attractive for investors to hold interest-bearing assets like US Treasuries over gold.