Gold prices remained relatively stable on Thursday, following a decline to a one-week low in the prior session, as elevated inflation data heightened expectations for a potential rate increase by the US Federal Reserve this month. Spot gold remained relatively stable at $4,114.57 per ounce as of 0007, following a decline to its lowest level since October 7 on Wednesday. US gold futures for December delivery increased by 0.7%, reaching a price of $4,136.10. In September, US consumer prices experienced an uptick, driven primarily by a significant rise in petrol costs.
This development has rekindled discussions regarding a potential interest rate increase later this month. The likelihood of a US rate hike this month was approximately 32%, an increase from 22% prior to the data release, as indicated by CME’s FedWatch Tool. San Francisco Fed President Mary Daly indicated that the US central bank is likely to require additional increases in short-term interest rates, although she suggested that a hike is not necessary at the upcoming meeting on October 27-28.
Gold is often regarded as a safeguard against inflation; however, the attractiveness of gold diminishes in the face of rising interest rates, as it yields no interest income. Attention is directed toward the forthcoming Producer Price Index and retail sales figures scheduled for release later today. Among other metals, spot silver increased by 0.2% to $55.72 per ounce, while platinum decreased by 0.5% to $1,598.96, and palladium experienced a rise of 0.6% to $1,100.25.
