Investing.com - Gold prices added to overnight gains in North American trade on Tuesday, as disappointing U.S. inflation data was seen as easing pressure on the Federal Reserve to tighten monetary policy, weighing on the dollar.
Gold for December delivery on the Comex division of the New York Mercantile Exchange tacked on $7.90, or 0.62%, to $1,264.55 a troy ounce by 8:40AM ET (12:40GMT). A day earlier, the yellow metal inched up $1.10, or 0.09%.
The U.S. Commerce Department said that consumer prices inched up 0.3% in September, matching expectations and up from 0.2% in the preceding month. Year-over-year, consumer prices increased 1.5% last month, after having risen 1.1% in August. That was its highest reading since October 2014.
Meanwhile, CPI, excluding the volatile food and energy components, rose 0.1%, missing forecasts for 0.2% and slowing from 0.3% a month earlier. In the 12 months through September, core CPI advanced 2.2%.
The disappointing report led investors to push back expectations for the next U.S. rate hike. Markets are currently pricing in around a 68% chance of a rate hike at December's meeting, according to Investing.com's Fed Rate Monitor Tool.
Gold is sensitive to moves in U.S. rates, which lift the opportunity cost of holding non-yielding assets such as bullion. A gradual path to higher rates is seen as less of a threat to gold prices than a swift series of increases.
The U.S. dollar index, which measures the greenback's value against a basket of six major currencies, was down 0.2% at 97.66 early Tuesday, moving away from the prior session's more than seven-month high of 98.15.
Also on the Comex, silver futures for December delivery climbed 23.3 cents, or 1.35%, to trade at $17.71 a troy ounce during morning hours in New York, while copper futures added 0.6 cents, or 0.28%, to $2.113 a pound.
China is scheduled to release data on third-quarter gross domestic product on Wednesday. The report is expected to show the world's second largest economy grew 6.7% in the three months to September. The economy grew by a similar amount in the second quarter and if confirmed, it could be a sign that growth in China is finally bottoming out.
The Asian nation will also publish data on September industrial production, fixed asset investment and retail sales along with the GDP report.
China is the world’s largest copper consumer, accounting for nearly 45% of world consumption.