Gold Soars to Two-Month High Amid Slowing US Inflation

Gold prices surged to a two-month high on Thursday as mild US inflation data cast doubt over an imminent Federal Reserve rate hike. The Consumer Price Index rose 3.4 percent in the 12 months through July, down from 3.5 percent in June, in line with economists' expectations.

The Fed's interest rate hike prospects took a hit, with traders now pricing in only a 40 percent chance of an increase at the September meeting, down from about 54 percent seen a week prior.

Expectations of lower rates tend to support gold by lowering the opportunity cost of holding the non-yielding asset. Spot gold climbed 0.6 percent to US$4,433.62 per ounce, while US gold futures for December delivery were also 0.6 percent higher at US$4,493.