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

Gold prices experienced a rebound towards a 10-week high on Wednesday, as traders braced for upcoming US inflation data. The precious metal gained 0.6% to $4,391.82 per ounce by 5:35 GMT, with US gold futures for December delivery rising 0.2% to $4,451.90. Despite reaching a 10-week peak on Tuesday, the rally was halted by technical resistance at the 100-day moving average near $4,387, causing gold to close lower for the second time this month.

Analyst Kelvin Wong of Oanda attributed the primary driver for gold's price movement to the reduction in the Federal Reserve's anticipated rate hikes. A bullish break above the $4,200 level early in the week generated positive momentum, leading to gold's largest weekly gain since January. Currently, traders are pricing in a 50% chance of a September rate hike, down from 60% before the latest jobs report.

Lower interest rates typically benefit gold, as the metal does not generate income. The imminent release of US Consumer Price Index data may alter expectations regarding interest rates. Fed Bank of Chicago President Austan Goolsbee expressed greater concern about excessive inflation than labor market weakness. Meanwhile, oil prices continued to rise following separate attacks on shipping reported by the US and Houthis, while prospects for resolving the Iran war appeared to diminish as Tehran announced that the Strait of Hormuz would remain closed unless Washington agreed to its conditions.

Silver prices climbed 0.8% to $65.20 per ounce, trading below their peak since June 22, while platinum and palladium each increased 0.2% and 0.8%, respectively.