Investing.com – Gold prices rose for the first time in three days after the dollar came under pressure but gains were capped as data showed the pace of U.S. consumer prices hit a 7-month high in August raising expectations for a Federal Reserve rate hike later this year.
Gold futures for December delivery on the Comex division of the New York Mercantile Exchange fell by $2.61, or 0.20%, to $1,330.50 a troy ounce.
Gold prices halted a three-day losing streak as the dollar eased despite inflation and jobs data topping expectations pointing to an improving U.S. economy which could influence the Federal Reserve to stick to its plan to hike rates at least once more this year.
The Labor Department said on Thursday its Consumer Price index rose 0.4% last month after edging up 0.1% in July. The uptick in consumer prices in August was the largest monthly gain in seven months and lifted the year-on-year increase in the CPI to 1.9% from 1.7% in July.
In a separate report the U.S. Department of Labor reported that initial jobless claims decreased by 14,000 to 284,000 in the week ended Sept. 10, confounding forecasts of a 2,000 increase.
Some analysts believe, however, the Fed will taper its rate hike outlook as inflation will continue to undershoot the central bank’s expectations, boosting demand for gold.
“The Fed are notoriously optimistic with its inflation expectations, so investors could be surprised with how slow the body actually raises the cost of borrowing which is good news for gold,” said Adrienne Murphy, chief market analyst at AvaTrade.
Gold is sensitive to moves in U.S. rates, which lift the opportunity cost of holding non-yielding assets such as bullion.
In other precious metal trade, silver futures fell 0.41% to $17.79 a troy ounce while platinum futures lost 0.15% to $981.75.
Copper traded at $2.96, down 0.81%, while natural gas rose by 0.26% to $3.06.