Gold is on track for largest 1-day price gain in nearly a month – MarketWatch

Gold futures were on track for their biggest single-session price gain in nearly a month Wednesday after a U.S. consumer-price report suggested that inflation might be short of the Federal Reserve's target levels to support a rate hike.

Gold for December delivery GCZ5, +1.51%  added $ 18.90, or 1.7%, to $ 1,121.40 an ounce on Comex, up from $ 1,109.50 before the CPI data were released Wednesday. Prices haven't scored a session point or percentage gain this high since Aug. 20.

"Price action in gold is ultra-sensitive … as everyone in the market is looking to, and positioning ahead of the Fed" decision, said Tyler Richey, co-editor for The 7:00's Report. "That was clear when the light CPI number hit this morning and spurred some short covering."

The Fed has been keenly watching employment and inflation as two key gauges to help influence its plans for kicking off the first interest-rate hike in nearly a decade.

Data Wednesday showed that the price of consumer goods fell in August for the first time since the beginning of the year, down by a seasonally adjusted 0.1%.

With the tick down in inflation, the central bank may hesitate to implement tighter monetary policy if it isn't confident inflation is headed to its target 2% level.

See also: 5 reasons for the Fed to raise rates (and 5 reasons not to)

The Federal Open Market Committee concludes its closely watched two-day meeting Thursday with a policy statement and news conference, which could see the central bank provide clues to the pace of interest-rate hikes—a move that has broad implications for a host of assets including dollar-denominated gold.

Against that backdrop, the U.S. dollar index DXY, -0.35% traded lower, supporting a move higher in dollar-denominated gold.

In other metals, December silver SIZ5, +3.97% jumped 54.4 cents, or 3.8%, to $ 14.87 an ounce and December copper HGZ5, +1.03%  added 2.9 cents, or 1.2%, to $ 2.455 a pound. October platinum PLV5, +1.40%  rose $ 16.40, or 1.7%, to $ 974.60 an ounce, while December palladium PAZ5, +1.32%  traded at $ 606.10 an ounce, up $ 5.65, or 0.9%.