Gold Soars on Dovish US Inflation Data

Gold prices soared to an over two-month high on Thursday as mild US inflation data led investors to doubt an imminent Federal Reserve rate hike.

The Consumer Price Index rose 3.4% in the 12 months through July, down from 3.5% in June, according to the Bureau of Labor Statistics report.

As a result, traders are now pricing in only a 40% chance of an interest rate hike at the Fed's September meeting, down from about 54% seen a week before.

The expectation of lower rates tends to support gold by lowering the opportunity cost of holding the non-yielding asset.

Gold hit $4,433.62 per ounce by 0108 GMT, with U.S. gold futures for December delivery also rising 0.6% to $4,493.