Gold prices rise 1.3% as the dollar weakens
In the markets, investors are closely evaluating the interest rate policy the Fed will follow in the wake of US inflation data.
Gold gained over 1% in value as the US dollar weakened, recovering from a one-week low recorded in the previous session, with spot gold climbing to $4,158.63 per ounce.
Recovery in Precious Metals
Spot gold recorded an increase of 1.3% in the markets to rise to $4,158.63 per ounce, while US December gold futures gained 1.8% in value to reach $4,180.
Having seen its lowest level since October 7 on Wednesday, spot gold showed a tendency to recover during the night under the influence of the dollar retreating from an 18-month peak.
US Inflation Data and Fed Policy
Investors continue to evaluate the probability of the Fed raising interest rates this month following the US inflation data which came in above expectations.
According to CME FedWatch data, the market probability of a Fed rate hike rose from 22% prior to the inflation data to 27%.
Assessments by Market Experts
Capital.com Senior Financial Markets Analyst Kyle Rodda stated that the current volatility in the markets stems from uncertainties regarding US interest rate policy.
Rodda noted that if expectations strengthen that strong economic data could push the Fed toward an urgent rate hike, gold could focus on just below the $4,000 level.
Statements by Fed Officials
San Francisco Fed President Mary Daly said that further increases in short-term interest rates might be required while pointing out that a hike at the October 27-28 meeting was not mandatory.
Meanwhile, Fed Vice Chair Michelle Bowman expressed that they have time to monitor developments before taking a new step.
Status of Other Precious Metals
Alongside the rise in gold, upward movements were also observed in other precious metals as market trading concluded.
Spot silver rose 1.1% to $56.26 per ounce, platinum advanced 0.3% to $1,611.15, and palladium increased 1.3% to $1,107.83.