Chicago, Sep 17 (IANS) Gold futures on the COMEX division of the New York Mercantile Exchange rallied on Wednesday as US consumer prices came in soft in August, that lowered expectations for a rate hike this month by the Federal Reserve.
The most active gold contract for December delivery added $16.4, or 1.49 percent, to settle at $1,119 per ounce, Xinhua reported.
Data released on Wednesday showed the US consumer-price index fell by 0.1 percent in August from the previous month, the first decline since January, due to cheaper gasoline.
The downbeat data suggested that inflation might be short of the Federal Reserve’s target levels to support a rate hike, undercutting the dollar.
The US Dollar Index, a measure of the dollar against a basket of six major currencies dropped about 0.35 percent in late trading.
Gold and the dollar typically move in opposite directions, which means a weaker US dollar can be a positive for commodities priced in dollars because it makes them more expensive for non-dollar users, while a stronger dollar can weigh on commodities.
The Federal Open Market Committee on Wednesday kicked off its two-day policy meeting at which the Fed might raise its benchmark interest rate for the first time in more than nine years.
The Fed has been keenly watching employment and inflation as two key gauges to help influence its plans for the first interest-rate hike in nearly a decade.
The Fed will release its crucial policy statement on Thursday afternoon.
Among other metals, silver for December delivery rose 55.9 cents, or 3.90 percent, to close at $14.885 per ounce, while platinum for October delivery added $17.5, or 1.83 percent, to close at $975.7 per ounce.