Gold hit an over two-month high on Thursday, as tame US consumer inflation undermined expectations of an imminent Federal Reserve rate hike, with markets awaiting producer price data for more signs of cooling price pressures.
Spot gold climbed 0.6 percent to US$4,433.62 (HK$34582.24) per ounce by 0108 GMT, after jumping about 1 percent to its highest since June 5 earlier. US gold futures for December delivery were also 0.6 percent higher at US$4,493.
Fed policymakers are likely to feel little fresh urgency to raise interest rates next month after data on Wednesday showed inflation cooled on a year-over-year basis for a second straight month, but they may take little comfort that monetary policy is tight enough to continue the easing trend.
The Consumer Price Index rose 3.4 percent in the 12 months through July, down from 3.5 percent in June, the Bureau of Labor Statistics reported, in line with economists' expectations.
Traders are now pricing in only a 40 percent chance of an interest rate hike at the Fed's September meeting, down from about 54 percent seen a week before, according to the CME FedWatch Tool.
Expectations of lower rates tend to support gold by lowering the opportunity cost of holding the non-yielding asset.
Attention now shifts to the Producer Price Index (PPI), due later in the day, for confirmation that price pressures are moderating.
The CPI print for July did not capture the most recent rise in oil prices as attacks on ships in the Middle East continued and talks to end the Iran war hit an impasse.
In other metals, spot silver gained about 1 percent to US$65.91 per ounce, having climbed to its highest since June 22 in the previous session.
Platinum added 0.3 percent at US$1,762.70, while palladium was up 0.1 percent at US$1,371.20.
Reuters
