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Gold prices rise as dollar yields fall due to inflation data

Gold prices reversed course on Thursday and climbed higher after the U.S. inflation reading?came in line with expectations. This eased some concerns over imminent Federal Reserve rate increases and pushed down Treasury yields and the dollar.

As of 9:15 am EDT (1315 GMT), spot gold rose 0.7% to $4,029.09 per ounce after dropping as much as 1% in earlier sessions.

U.S. Gold Futures for August Delivery? rose 0.9% to $4.045.20 an oz.

The PCE data appears to have been in line with expectations. David Meger is director of metals trading at High Ridge Futures.

The U.S. Personal Consumption Expenditures Price Index surged by 4.1% over the past 12 months, marking the first time since April 2023 that the index has risen above 4.0%. Economists surveyed by predicted a 4.1% increase in?PCE inflation.

After the data, the U.S. dollar lost its gains and turned lower. This made greenback-priced gold cheaper for overseas merchants. Treasury yields were also pushed lower.

The CME FedWatch data showed that the markets see an 80% probability of a rate increase in December. This compares to an 85% likelihood before the release the PCE and a 61% likelihood before the Fed's statement last week.

The main focus will continue to be inflationary pressures in the future. Meger said that this is one of the reasons why gold has declined over the last few sessions.

Gold prices dropped below $4,000 per ounce?on Wednesday, for the first time since November 2025. This was due to expectations that interest rates will rise this year following the U.S. Federal Reserve's policy meeting.

Higher interest rates, despite being an inflation hedge, dampen the appeal of bullion as investors switch to yield-bearing investments.

As a result, oil prices dropped to their pre-war level as the expectation?of increased supply from the Middle East outweighed concerns about demand. An accord?agreed to last week that ended the U.S. - Israeli war allowed for the resumption in traffic through the Strait.

Spot silver increased 2.2%, to $58.68 an ounce. Platinum rose 1.8%, to $1.606.09. Palladium increased 2.7% to $1199.47. (Reporting by Anjana Anil in Bengaluru; Editing by Leroy Leo)

(source: Reuters)