Gold Holds Near $4,155 as US Inflation Softens and Rate-Hike Odds Slip

Spot gold traded close to $4,155 an ounce on Thursday, after a modest dip the previous day, as the latest US personal consumption expenditures price index showed a smaller-than-anticipated increase in August. The softer core PCE figure lowered market expectations for a Federal Reserve rate hike at its upcoming meeting to roughly 34%, compared with almost 70% earlier in the week. Despite the easing inflation pressure, long-dated Treasury yields have risen to multi-decade highs, sustaining the appeal of higher-yielding assets over non-yielding gold.

Commodity strategist Ewa Manthey of ING Bank noted that while the PCE data offered some support, the overall environment remains risky for bullion. Traders will also watch Friday’s jobs report for additional clues on the Fed’s policy path, while silver, platinum and palladium slipped modestly.