Gold Surges as US Inflation Data Weakens Rate Hike Bets

Gold prices surged over 1% on Wednesday after US inflation data showed a slight increase in July, which may weaken the case for an interest rate hike by the Federal Reserve next month.

The Consumer Price Index (CPI) rose 0.1% last month, matching estimates and following a 0.4% drop in June. The Fed's decision to keep rates unchanged in its previous meeting has now been bolstered by this data.

According to Marex analyst Edward Meir, 'The CPI data has been encouraging. It was higher than last month, but it was in line with estimates, along with a weaker dollar and technicals which have all helped gold piggyback on it.'

The US dollar index slipped 0.1%, making dollar-priced bullion more affordable for buyers overseas.