Update: Gold Rises as a Key U.S. Inflation Measure Rose in August But Matched Expectations

02:00 PM EDT, 09/26/2025 (MT Newswires) -- (Updates prices.)

Gold traded higher early on Friday as a key U.S. inflation measure rose last month but matched expectations, clearing the way for another interest-rate cut from the Federal Reserve next month.

Gold for December delivery was last seen up $38.00 to US$3,809.10 per ounce.

The U.S. Bureau of Economic Analysis reported the Personal Consumption Expenditures (PCE) Index, the Federal Reserve's preferred inflation measure, rose at a 2.7% annualized pace in August, up from 2.6% in July but matching the consensus estimate, according to Marketwatch.

While inflation remains above the Fed's 2% target rate, the central bank is still widely expected to cut interest rates again at its next policy meeting. The CME FedWatch Tool sees an 87.7% probability for a 25 basis point cut to rates following the Oct.29 end to the two-day meeting of the Federal Open Market Committee.

Expectations lower rates are on the way has kept gold near its Sept.23 record high of US$3,815.70, while geopolitical risk is also offering support amid a slowing U.S. economy, with President Trump's attempts to interfere with the Fed's independence, continuing violence in the Middle East and Russia's war on Ukraine keeping safe-haven demand high.

The dollar moved lower following the inflation report. The ICE dollar index was last seen down 0.38 points to 98.18. Treasury yields were mixed, with the yield on the U.S. two-year note last seen down 0.2 basis points to 3.653%, while the 10-year note was paying 4.192%, up 2.4 points.

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