Gold prices recovered slightly on Wednesday after dropping nearly 3% in the previous session. However, the recovery remained limited as stronger-than-expected US inflation data increased expectations of another interest rate hike by the Federal Reserve next month.
Spot gold rose 0.3% to $4,043.62 per ounce by 03:03 GMT, recovering from Tuesday’s low of $4,017.21. US gold futures for December delivery also gained 0.5%, reaching $4,051.10 per ounce.
On Tuesday, expectations of a possible half-percentage-point interest rate hike next month increased after new data showed that US inflation rose more than expected in October. Federal Reserve officials also signaled that they may be ready to tighten monetary policy further.
Higher interest rates can put pressure on gold because they make interest-paying investments more attractive. This continues to limit gold’s recovery despite the latest price increase.