Gold Edges Higher on Soft US Inflation and Reduced Rate Hike Expectations
Gold prices rose on Thursday as softer-than-expected US inflation data reduced expectations of a Federal Reserve interest rate hike in October. Spot gold gained 0.5% to USD 4,175.19 an ounce by 0417 GMT.
The move follows gold's decline of more than 6% in September. The latest inflation reading showed prices increased less than expected in August, with previous month revisions also lower.
Markets had priced in a 38% chance of an October rate hike before the data release, but this has now decreased to 45%, according to Reuters. Expectations for a December rate increase remain elevated at 97%.
Gary Spivak, head of global macro at Tastylive, noted that incoming data will be important in determining the Federal Reserve's interest-rate path and, consequently, gold prices.