Gold inches higher as softer US inflation dims October Fed hike bets

Business Recorder reported that gold edged higher on Thursday after softer-than-expected US inflation data eased bets on a Federal Reserve rate increase in October. Spot gold climbed 0.5% to $4,175.19 an ounce by 0417 GMT, starting October on a firmer footing after a fall of more than 6% in September. US gold futures for December delivery added 0.4% to $4,204.80.

Data released on Wednesday showed inflation rose by less than forecast in August, while the prior month's figure was revised lower. Markets now put the chance of an October increase at 38%, down from 45% before the release, though traders still see a 97% probability of a December hike. Higher interest rates make gold less attractive because the metal pays no interest.

A stronger dollar, which sat near a two-month high, capped gains since it makes dollar-priced metals more expensive for holders of other currencies. TD Securities' Bart Melek said the September decline was unlikely to be made up, but he argued the sharpest part of the correction appeared to be behind gold. Silver rose 1.2% to $61.11, platinum gained 0.7% to $1,717.35 and palladium firmed 0.3% to $1,207.12 ahead of Friday's US nonfarm payrolls report.