Gold prices rose 0.3% as the impact of the strengthening US dollar was offset by increased demand for safe haven assets due to heightened concerns about the broader conflict in the Middle East.
Investors are also preparing for the release of US CPI data, which will help assess the Fed's further actions. Experts said that If core CPI comes hotter, U.S. Treasury yields will go higher, which will put pressure on gold. The core CPI is expected to grow by 0.2% per month and 3.2% per annum in September. According to the CME FedWatch Tool, markets see a 86.2% probability of a 0.25% rate cut at the November meeting (compared to 67.9% a week earlier), with a 0.5% rate cut expected by the end of the year. The zero-yielding bullion is preferred in a low-interest rate environment as well as amid periods of economic and geopolitical turmoil.
Meanwhile, the minutes of the Fed's September meeting, presented yesterday, showed that policymakers agreed to cut interest rates but were unsure how aggressive to get, ultimately deciding on a 0.5% move in an effort to balance confidence on inflation with worries over the labor market. Some officials hoped for a smaller, 0,25% reduction as they sought assurance that inflation was moving sustainably lower and were less worried about the jobs picture.