Slower US Inflation Shifts Expectations for October Rate Hike

Gold and silver prices rose on Thursday as slower U.S. inflation reduced the possibility of a Federal Reserve rate hike in October.

The Personal Consumption Expenditures price index, the Fed's preferred measure of inflation, increased 3.4% from a year ago in August, below economists' expected 3.7% rise.

This unexpected slowdown shifted expectations for a possible October Fed Funds rate hike from about 45% to about 36-38%, according to fed funds futures markets.

John Williams, President of the New York Fed, said he does not see a reason for the Fed to increase rates from current levels in the near term.