Gold steadies after hitting one-week low

LONDON: Gold prices were nearly steady on Thursday after touching a one-week low in the previous session as hot inflation data boosted expectations of a US Federal Reserve rate hike this month.

FUNDAMENTALS

Spot gold was little changed at US$4,114.57 per ounce, as of 0007 GMT, after hitting its lowest level since Oct 7 on Wednesday. US gold futures for December delivery rose 0.7 per cent to US$4,136.10.

US consumer prices accelerated in September as the cost of gasoline surged, putting an interest rate increase later this month back on the radar.

The probability of a US rate hike this month stood at roughly 32 per cent, compared with 22 per cent before the data, according to CME's FedWatch Tool.

San Francisco Fed president Mary Daly said the US central bank will probably need to increase short-term interest rates further, though she signalled no need for a hike at the Oct 27-28 meeting.

Although gold is viewed as an inflation hedge, higher interest rates reduce its appeal because it does not pay interest.

Focus turns to the producer price index and retail sales data due later in the day.

Among other metals, spot silver was up 0.2 per cent at US$55.72 per ounce, platinum fell 0.5 per cent to US$1,598.96 and palladium rose 0.6 per cent to US$1,100.25.