Spot gold climbed 1.6 per cent to 4,385.14 dollars an ounce and the S&P 500 snapped a four-day slide to gain 0.86 per cent, as investors absorbed higher-than-expected August inflation data. Futures markets lifted the priced probability of a Federal Reserve (Fed) interest rate increase at the upcoming policy meeting to approximately 90 per cent, stabilizing equities and driving broad recoveries across precious metals.
Spot gold rose 1.6 per cent to 4,385.14 dollars an ounce, recovering from a near 2 per cent decline the previous day while remaining about 1 per cent lower on the week. US gold futures added 0.5 per cent to 4,426.90 dollars. Silver climbed 2.1 per cent to 64.86 dollars, platinum advanced 1.5 per cent to 1,803.94 dollars, and palladium gained 2.9 per cent to 1,318.91 dollars, participating in broad dip buying following the initial inflation report.[1], [2]
The S&P 500 index rose 0.86 per cent to 7,656, ending a four-day decline led by technology, industrials, and communication shares. The Nasdaq Composite added 0.96 per cent to 26,333 and the Dow Jones Industrial Average gained 0.98 per cent. Nine of the eleven sectors in the S&P 500 finished higher, though the major indexes still posted weekly losses of 0.8 per cent for the S&P 500, 1.6 per cent for the Dow Jones, and 0.7 per cent for the Nasdaq.[2]
After August core inflation reached 0.3 per cent on the month, traders on the CME FedWatch tool raised the priced probability of a Federal Reserve rate increase at next week's meeting to between 85 per cent and 90 per cent, up from 67 per cent to 70 per cent before the release. Independent market analysts noted that extensive prior pricing capped market volatility and provided valuation clarity, supporting the equity rebound even as investors pulled 32.27 billion dollars from US equity funds over the week.[1], [2]
