Gold Prices Jump to Session Highs After U.S. Inflation Miss

Gold prices ticked higher on Thursday, hitting the strongest levels of the session after data showed that U.S. consumer prices rose less than expected in August.

Comex gold futures were up $5.50, or 0.45%, at $1,216.60 a troy ounce by 9:00AM ET (1400GMT).

Meanwhile, spot gold was trading at $1,211.40 per ounce, up $5.20, or 0.4%.

The Labor Department said on Thursday its consumer price index advanced 0.2%, missing expectations for a gain of 0.3%.

In the 12 months through July, the CPI increased 2.7%, below forecasts for a reading of 2.8% and slowing from 2.9% in July.

Excluding the volatile food and energy components, the CPI edged up 0.1%, below forecasts for a gain of 0.2%.

The annual increase in the core CPI was 2.2%. Economists were looking for it to hold steady at July’s 2.4% advance.

Core prices are viewed by the Federal Reserve as a better gauge of longer-term inflationary pressure precisely because they exclude the volatile food and energy categories. The central bank usually tries to aim for 2% core inflation or less.

The Fed is expected to raise interest rates at its Sept. 25-26 policy meeting. It has raised rates twice this year.

Meanwhile, investors remained focused on the U.S.- China trade dispute following news that the Trump administration has invited Chinese officials to restart trade talks, which raised hopes for a deal easing the bitter tariff dispute between the world’s two biggest economies.

In other metals action, silver futures were 3.7 cents, or 0.3%, higher at $14.33 a troy ounce.

Platinum was up 1.4% at $811.20, while palladium gained 0.7% to $971.70.

December copper inched up 2.5 cents, or 0.9%, to $2.702 a pound./

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