Gold prices edged higher on Wednesday as softer-than-expected U.S. CPI data boosted bets the Federal Reserve will forgo any more interest rate hikes and indeed start cutting rates by May. Markets currently price in a 50 basis-point rate cut by July.
Spot gold rose 0.40 percent to $1,971.21 per ounce, while U.S. gold futures were up 0.4 percent at $1,974.90.
The dollar weakened and Treasury yields dipped after overnight data showed the annual rate of consumer price growth in the U.S. slowed to 3.2 percent in October from 3.7 percent in September. Economists had expected the pace of growth to decelerate to 3.3 percent.
Core consumer prices were up by 4.0 percent year-on-year, reflecting the smallest year-over-year increase since September 2021.
Inflation data from the U.K., Germany and France reported earlier in the day also added to recent signs of moderating price pressures.
U.S. reports on retail sales, producer prices and New York manufacturing may sway sentiment in the New York session.
