Gold Holds Steady as Softer Inflation Data Cools Hike Expectations

Gold prices remained steady on Thursday as markets digested a softer-than-expected US inflation report, which lowered expectations of a Federal Reserve rate hike in October. The data showed that US inflation rose less than expected in August, while price pressures were revised lower for the prior month.

The weaker inflation numbers reduced expectations of a rate hike in October, with markets pricing in a 37% chance, down from 45% before the release. Traders still see an 89% probability of an increase in December, however.

Nitesh Shah, commodity strategist at WisdomTree, said that yesterday's inflation numbers were helpful for gold as they weren't as strong as the market had expected and therefore helped dial down some of the expectations for rate hikes. He added that bond market volatility points to gold being a possibly better anti-fragile hedge.

The spot price of gold was little changed at $4,155.60 per ounce, while US gold futures for December delivery held steady at $4,185.50. The metal fell over 6% in September.