Gold recovers slightly after 6 sessions ahead of key US inflation data

Gold prices recovered slightly on Thursday to snap a six-session losing streak, while traders remain focused on a key US inflation reading for insights on a potential rate reduction by the Federal Reserve this year.

Spot gold was up 0.3 per cent at $2,615.19 per ounce, as of 0833 GMT. US gold futures edged 0.2 per cent higher to $2,632.30.

"Expectations of further rate cuts are giving a modest lift to gold, despite much firmer Treasury yields and US dollar," independent analyst Ross Norman said.

The US dollar strengthened to a 10-week peak against the yen and Treasury yields climbed as investors continued to price in a less-aggressive monetary easing cycle from the Fed. [USD/] [US/]

Investors await the US Consumer Price Index (CPI) for September, due at 1230 GMT, which is expected to show core inflation holding steady at a 3.2 per cent year-on-year basis, according to economists polled by Reuters.

Their focus will shift to US Producer Price Index data on Friday.

"By the end of today when the (CPI) data comes out, we expect gold prices to potentially challenge the $2,640 level," said Brian Lan, managing director at Singapore-based dealer GoldSilver Central.

San Francisco Fed President Mary Daly expressed on Wednesday strong support for last month's half-percentage-point rate cut, indicating that one or two more cuts may be likely this year if the economy evolves as expected.

"We also continue to see strong central bank purchases for gold, and believe that uncertainty around the fast-approaching US election should support the bullion," USB said in a note, adding that they forecast gold to reach $2,850 per ounce by mid-2025.

Spot silver was steady at $30.51 per ounce, platinum added 1.2 per cent to $956.50 and palladium added 0.4 per cent to $1,043.74.