Gold hits $4,165 as cooling US inflation shifts interest rate outlook

Gold prices climbed on Friday, 2 October, reaching $4,165.29 per ounce after U.S. inflation data arrived lower than market forecasts, prompting investors to scale back expectations for a Federal Reserve interest rate hike this month. Precious metals market performance Spot gold increased 0.2 percent to $4,165.29 per ounce in New York trading. The gains were mirrored in the futures market, where U.S. gold futures for December delivery settled 0.4 percent higher at $4,202.30. The price action follows a cooling in U.S. consumer price indicators, which typically strengthens non-yielding assets like bullion by lowering the opportunity cost for holders. Other precious metals showed mixed results during the session. Spot silver gained 0.2 percent to reach $60.51 per ounce, while platinum edged up 0.1 percent to $1,707.56. Conversely, palladium experienced a sharp decline, falling 2.2 percent to settle at $1,178.57. Federal Reserve policy outlook The price movement is driven by the immediate release of U.S. inflation figures, which have shifted the probability of a rate hike during the Federal Reserve's upcoming policy meeting. Lower inflation reduces the pressure on central banks to maintain restrictive monetary policies, often leading to a weaker dollar and higher demand for gold as a hedge. For UAE-based investors and retail buyers, the rise in global spot prices directly impacts local jewelry and bullion rates in Dubai and Abu Dhabi. Markets will now focus on upcoming labor…