Gold edges higher after US inflation lifts Fed hike bets
In short
Gold prices rose 0.2% to $4,039.07 an ounce in early Asian trade on Wednesday after falling nearly 3% the day before.
The move matters because hotter US inflation has made traders expect the Federal Reserve to raise rates again in December.
What the reporting says
Gold prices rose 0.2% to $4,039.07 an ounce in early Asian trade on Wednesday after a nearly 3% drop in the previous session. The move followed US inflation data that pointed to stronger inflation and pushed up expectations of a Federal Reserve interest-rate hike next month. Traders now see a 100% chance of a December rate increase, which pressured bullion.
Why it matters
Gold rose 0.2% to $4,039.07 an ounce in early Asian trade on Wednesday after a nearly 3% slump in the prior session. The selling came after US inflation data increased expectations of a Federal Reserve rate hike next month, with traders pricing in a 100% chance of a December increase. Higher rate expectations can weigh on bullion because they raise the appeal of yield-bearing assets.