Gold rebounds towards 10-week high as markets brace for US inflation data

Dawn reported that spot gold climbed 0.6 per cent to $4,391.82 an ounce early on Wednesday, as traders pared back expectations of another Federal Reserve rate increase next month. December US gold futures were quoted 0.2pc higher at $4,451.90. The move came ahead of American consumer price figures that many investors expected to shape the central bank's policy path.

Bullion had reached a 10-week peak on Tuesday before stalling near the 100-day moving average, around $4,387, and finishing lower for a second time this month. Oanda's Kelvin Wong credited the rally mainly to a smaller chance of Fed hikes and noted that a breakout above $4,200 late last week had added upward momentum. Gold recorded its strongest weekly advance since January after weaker than expected jobs figures led traders to trim their wagers on US rate increases.

Traders now price in a 50 per cent chance of a September hike, down from 60 per cent before the jobs report, based on CME FedWatch figures. Oil also rose after the US and the Houthis each reported attacks on shipping, and Tehran indicated the Hormuz passage will stay blocked until Washington agrees to its terms. Locally, a 24-karat tola now costs Rs463,936 after a Rs4,200 rise, while 10 grams climbed Rs3,601 to Rs397,750, figures the All Pakistan Sarafa Gems and Jewellers Association released.