Gold climbs 1%, near 2-month peak in run-up to US CPI report

Gold prices surged over 1% on Wednesday, buoyed by expectations of a delayed Federal Reserve interest rate hike as investors anticipated crucial U.S. inflation data. Spot gold reached $4,413.69 per ounce, up 1.1%, while December futures climbed 0.7% to $4,473.10 per ounce. The metal hit its highest level since June 5, before reversing after hitting resistance at its 100-day moving average near $4,387 an ounce.

The pivot to focus on U.S. inflation followed weaker-than-expected U.S. employment data, with UBS analyst Giovanni Staunovo predicting a potential lower CPI print would lead to expectations of further Fed rate cuts, but high gasoline prices should limit upside in the near term. CPI data is expected to show a 0.1% rebound, after a 0.4% decline in June.

The chance of a September rate hike has decreased to 48%, down from 60% before the jobs report, according to the CME FedWatch Tool. Fed Bank of Chicago President Austan Goolsbee emphasized concerns over high inflation over labor market weaknesses. Gold had its strongest weekly performance since January, driven by weaker-than-expected employment data that prompted traders to adjust their U.S. rate-hike expectations.

Oil prices continued to rise following attacks on two ships, raising concerns about Middle East supply disruptions. Gold has decoupled from oil prices, supported by increased ETF inflows and demand from China and central banks. Silver rose 2.5% to $66.26 per ounce, platinum increased 1.3% to $1,767.70, and palladium also gained 2.1% to $1,389.