Gold prices rebounded on Friday after inflation came in hotter than expected. Bullion rose 0.7% to $2,647.25 per ounce, while spot gold increased by 0.4% to $2,639.00.
While the Federal Reserve cut its interest rate by 50 basis points at its latest policy meeting, US inflation reports on Thursday showed that inflation rose more than expected, thereby drawing concerns over whether the central bank cut the rate prematurely. In addition, the latest US jobs report showed that applications for unemployment benefits rose to a one-year high. Despite the latest incoming data, Fed policymakers John Williams, Austan Goolsbee, and Thomas Barkin all appear unconcerned, indicating that the Fed can continue cutting rates at its next meeting.
Markets are betting on a 25 basis point cut in November, with the price of gold expected to be lifted further as interest rates drop. Gold prices have risen by over 25% since the start of the year.