Gold gains as cooler US inflation data counters higher Treasury yields
GLD•Spot gold rose 0.6% to $4,183.22 per ounce after US inflation undershot forecasts, reducing expectations of an October Federal Reserve rate hike. Higher Treasury yields and a stronger dollar limited gains.
1. Gold prices rise
Spot gold was up 0.6% at $4,183.22 per ounce, while US gold futures for December delivery gained 0.6% to $4,212.80. Gold fell more than 6% in September.
2. Rate expectations shift
US inflation rose less than expected in August, and price pressures were revised lower for the prior month. Markets priced in a 37% chance of an October rate hike, down from 45% before the data, while the probability of a December increase stood at 89%. Ten-year Treasury yields reached their highest level in more than two decades, and a stronger dollar also limited gold's gains. Investors were watching for the US nonfarm payrolls report due Friday and remarks from Federal Reserve policymakers.
