NEW YORK: Gold prices rose on Thursday as softer-than-expected US inflation data reduced bets for a Federal Reserve rate hike in October, while investors awaited key US jobs data due later this week. Spot gold rose 0.6percent to USD4,181.02 per ounce by 08:56 a.m. EDT (1256 GMT), while US gold futures for December delivery were up 0.6percent at USD4,211.20. Gold prices fell over 6percent in September.
Data on Wednesday showed US inflation rose less than expected in August, while price pressures were revised lower for the prior month. The data reduced the likelihood of an October rate hike, with markets now pricing in a 37percent chance, down from 45percent before the release and 69percent a week ago.
“It’s those lower rate hike expectations that have supported the precious metals markets,” said David Meger, director of metals trading at High Ridge Futures.
Limiting further gains in bullion, 10-year US Treasury yields scaled their highest level in more than two decades, raising the opportunity cost of holding gold, while a stronger dollar made greenback-priced bullion more expensive for holders of other currencies.
Investors now await Friday’s September US nonfarm payrolls report and remarks from Fed policymakers for clues on the monetary policy outlook.
“The weaker risk appetite and lower Fed rate hike bets have assisted gold, but the short-term trend remains bearish. A retest of the USD4,000 level remains on the cards, especially if tomorrow’s nonfarm payrolls report surprises on the upside,” Achilleas Georgolopoulos, senior market analyst at XM Trading, said in a note. Meanwhile, HSBC cut its average gold price forecasts for 2026 and 2027 to USD4,490/oz and USD4,825/oz, respectively, saying gold could face further near-term pressure but was likely nearing a bottom.
Additionally, HSBC expects central banks to resume buying in reaction to price declines, especially near or below USD4,000. Among other metals, spot silver rose 1.3percent to USD61.21, platinum gained 1.1percent to USD1,723.99, while palladium dipped 0.7percent to USD1,195.80.
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