Gold edges up to £3,160 an ounce as softer US inflation trims Fed hike bets

Gold was trading at around £3,160.14 a troy ounce on Thursday morning, according to The Royal Mint, which works out at roughly £101.60 a gram before dealer costs. That is a small recovery from Tuesday's seven-week low near £3,114. In dollar terms, Trading Economics quoted gold at about $4,182, up 0.59 per cent on the day, while Vantage Markets put it nearer $4,155 in early Asian trading.

The lift came from Wednesday's US inflation figures. Core PCE prices rose just 0.2 per cent in August, with the headline rate at 3.4 per cent against forecasts of 3.7 per cent. Vantage Markets reports that markets now price roughly a 37 per cent chance of a Federal Reserve rate rise in October, down from about 45 per cent before the data. Lower rate expectations tend to help gold, which pays no interest.

Gains have been capped, though, by bond yields. The US 10-year Treasury yield touched 5.306 per cent on Wednesday, its highest since June 2007. Gold is still down about 4.7 per cent over the past month but around 8.5 per cent higher than a year ago, according to Trading Economics.

Next up is Friday's US jobs report, then CPI inflation on 14 October and the Fed decision on 28 October. For UK buyers, investment gold is VAT free, so the all-in price, spot plus premium plus delivery, is what matters when comparing dealers. This is market information, not financial advice.