Gold rebounds towards 10-week high as markets brace for US inflation data

Gold prices surged on Wednesday, buoyed by reduced expectations of Federal Reserve rate hikes next month as investors anticipated crucial US inflation data. Spot gold climbed 0.6% to $4,391.82 per ounce by 0535 GMT. US gold futures for December delivery increased 0.2% to $4,451.90. The precious metal reached a 10-week high on Tuesday but faced technical resistance at the 100-day moving average around $4,387, closing lower for the second consecutive day this month.

Kelvin Wong, a senior market analyst at Oanda, attributed gold's upward movement primarily to the Fed's reduced rate hike projections. Bullish momentum emerged as gold broke above $4,200, creating a positive feedback loop. After weaker-than-anticipated jobs data on Friday, traders scaled back bets on US rate hikes, leading to silver's largest weekly gain since January.

The upcoming US Consumer Price Index data could reshape interest rate expectations, with Fed Bank of Chicago President Austan Goolsbee expressing greater concern over high inflation than labor market issues. Meanwhile, oil prices continued to rise following separate attacks on shipping and dimmed prospects for resolving the Iran war.