Gold Steadies Amid US Inflation Surge and Rate Hike Fears

SINGAPORE - Gold prices stabilized on Tuesday after a third straight week of declines following hotter-than-expected US inflation data that raised the likelihood of a Federal Reserve interest rate hike.

The core consumer price index, excluding food and energy costs, rose by 0.3% in August, according to data released on Friday. This has put pressure on the Fed to increase rates for the first time in three years, with traders pricing in an almost 90% chance of a hike.

JPMorgan Private Bank's Asia head of rates & FX strategy, Yuxuan Tang, noted that while the market has largely factored in the risk of a rate hike, gold still faces challenges if it materializes. However, she believes bullion will remain well-supported in the medium term due to rising recession risks.