Gold Gains as Softer US Inflation Cuts Rate Hike Bets
Gold prices rose on Thursday after a softer-than-expected US inflation report reduced expectations of a Federal Reserve rate hike in October. The data, released on Wednesday, showed that US inflation rose less than expected in August, while price pressures were revised lower for the prior month.
The reduction in inflation expectations led to a decrease in bets for an interest rate hike this month, with markets now pricing in a 36% chance, down from 45% before the release. However, traders still see an 89% probability of an increase in December.
A stronger US dollar limited gains for gold, as it makes dollar-priced metals costlier for holders of other currencies. Despite this, spot gold gained 0.8% to $4,187.43 per ounce by 0625 GMT, starting the month on a positive note after a more than 6% fall in September.
Other precious metals also rose, with spot silver up 1.4% to $61.23, platinum climbing 1.2% to $1,727.18, and palladium gaining 0.6% to $1,210.75.