Gold prices moved modestly higher on Thursday after U.S. inflation data came in below expectations, prompting traders to reduce bets that the Federal Reserve will raise interest rates at its October meeting. The shift helped support bullion, which tends to benefit when rate expectations ease because it offers no yield of its own. Still, the advance was limited by a firmer dollar and a sharp rise in longer-term U.S. Treasury yields, both of which can make gold less attractive. Investors are now looking to upcoming U.S. employment figures for clearer signals on the direction of monetary policy after a volatile month for precious metals.
Gold gains after inflation surprise
Spot gold rose 0.2% to $4,165.29 an ounce by mid-afternoon in New York, while December U.S. gold futures settled 0.4% higher at $4,202.30. The move followed a weak September for bullion, when prices dropped more than 6%.
Fresh data showed U.S. inflation increased less than analysts had expected in August, while the prior month’s price pressures were revised lower. After the release, market-implied odds of an October Fed rate increase fell to 31%, compared with 45% before the data and 69% a week earlier.
Yields and dollar cap upside
The supportive effect of lower rate-hike expectations was offset by 10-year U.S. Treasury yields climbing to their highest level in more than 20 years. Higher yields increase the opportunity cost of holding gold, while a stronger dollar makes the metal more expensive for buyers using other currencies.
Oil prices also rose after China suspended exports of oil products, a move that could tighten fuel markets and revive inflation concerns. Analysts said any renewed inflation pressure that strengthens the case for tighter Fed policy could weigh on gold sentiment.
Payrolls report in focus
Markets are awaiting the September U.S. nonfarm payrolls report for further clues on the interest-rate outlook. Some analysts warned that gold’s short-term trend remains fragile and that a stronger-than-expected jobs report could bring the $4,000 level back into view.
HSBC trims forecasts
HSBC lowered its average gold price forecasts to $4,490 an ounce for 2026 and $4,825 for 2027, saying near-term pressure may persist even as prices appear close to a bottom. The bank also expects central banks to resume purchases if prices fall toward or below $4,000.
Elsewhere in metals, silver rose 0.2% to $60.51 an ounce, platinum gained 0.1% to $1,707.56, and palladium fell 2.2% to $1,178.57.