Gold rises to $4,187 after US inflation data — Asharq Al-Awsat

U.S. spot gold rose by 0.8% on Thursday to $4,187.43 per ounce as of 06:25 GMT. The market reacted to data showing lower-than-expected inflation growth in the United States in August, while the estimate of price pressure for the previous month was revised downward. Asharq Al-Awsat reports, citing Reuters.

Expectations regarding the Fed rate

After the statistics were published, the market lowered its estimate of the probability that the U.S. Federal Reserve would raise interest rates in October to 36%, compared with 45% before the data were released. At the same time, traders put the probability of a rate hike in December at 89%.

Higher interest rates usually reduce the appeal of gold, as this asset does not generate interest income. Tastylive head of global macro strategy Ilya Spivak said that further macroeconomic data would be important in shaping expectations regarding the Fed's decisions.

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The market awaits employment data

The September report on nonfarm payrolls in the United States is due to be released on Friday. At the same time, gold's rise was restrained by the strengthening dollar: a more expensive U.S. currency makes dollar-denominated metals less accessible to holders of other currencies.

Gold lost more than 6% in September. TD Securities head of global commodity strategy Bart Melek said that the market was unlikely to fully recover these losses, but the worst part of the correction may already be over. U.S. December gold futures rose by 0.7% to $4,217.50 per ounce. Silver gained 1.4%, platinum 1.2%, and palladium 0.6%.