Gold rebounds from one-week low as dollar slips

Gold climbed more than 1% on Thursday, bouncing back from a one-week trough touched in the previous session as the greenback softened. According to Business Recorder, spot gold rose 1.3% to $4,158.63 an ounce by 0257 GMT, following Wednesday's drop to the weakest level seen since October 7. December-delivery US gold futures gained 1.8%, reaching $4,180.00 an ounce.

The dollar had reached an 18-month high overnight before easing, which makes bullion cheaper for overseas buyers. Traders are gauging whether the Fed lifts rates this month, after September inflation readings ran hotter in the US, lifted by higher gasoline costs. CME's FedWatch gauge puts the odds of a hike this month near 27%, against 22% before the release.

Kyle Rodda said the price swings reflect an uncertain market view of US rate policy, and flagged the level just under $4,000 as critical for gold. San Francisco Fed President Mary Daly expects the central bank to raise rates further but sees no need to act at the October 27-28 meeting. Focus now moves to producer price and retail sales figures scheduled for 1230 GMT.