Gold Prices Rebound After U.S. Inflation Data Spikes

Gold prices rebounded on Thursday, rising 1% to $4,146.48 an ounce after a sharp selloff threatened to push the metal below $4,000. The volatility followed a report from the Bureau of Labor Statistics showing the consumer price index rose 0.6% month-on-month in September, the fastest increase since April. This spike was driven largely by elevated energy costs.

The inflation data led investors to increase the probability of a Federal Reserve interest-rate hike at the October 27-28 policy meeting to approximately 30%. Austan Goolsbee, President of the Federal Reserve Bank of Chicago, described the figures as discouraging and suggested that investment in AI infrastructure might be overheating the economy.

Market participants are now awaiting guidance from Federal Reserve Chair Kevin Warsh, who is scheduled to speak during the International Monetary Fund meetings in Bangkok.