Gold Rises, but Rate Hike Expectations Limit Gains

Gold prices rose on Wednesday after falling about 3 percent in the previous session, but gains were limited as expectations grew for the Federal Reserve (the U.S. central bank) to raise interest rates next month following inflation data that came in stronger than expected, weighing on the precious metal. Spot gold rose 0.3 percent to $4,043.62 per ounce by 0303 GMT, after declining about 3 percent to $4,017.21 on Tuesday. U.S. December gold futures rose 0.5 percent to $4,051.10. Gold is typically viewed as a hedge against inflation, but higher interest rates increase the opportunity cost of holding the non-yielding yellow metal, reducing its appeal. Among other precious metals, spot silver rose 1.7 percent to $52.38 per ounce, and palladium gained 1.3 percent to $1,038.38.