Yesterday, the yellow metal received a long-awaited boost of optimism. A decline in the US inflation rate has raised hopes that the Fed may again delay the cut in bond purchases

On Tuesday, investors' attention was focused on a key fundamental factor, in particular, US inflation data as it could influence the Fed's plans ahead of its 2-day meeting next week.

According to a report by the US Department of Labor, the consumer price index increased by 0.3% in August compared to 0.5% in July. This is the slowest pace in 7 months.

Economists had forecast the index to rise by 0.4%. The slower-than-expected inflation rate eased fears that the US Federal Reserve would be forced to cut back on its bond-buying program.

Such prospects provoked a decline in 10-year Treasury yields. The indicator dived to its lowest level since August 24 and amounted to 1.280%.

Due to the fall in bond yields, the US dollar also took a downward route. Its index slipped by 0.1% to 92.51. This opened the way up for the precious metal.

Yesterday, gold added 0.7% or $12.70. On the New York Stock Exchange COMEX, the asset closed the session above the key mark of $1,800 per troy ounce. The level of $1,807.10 was its final point which is the highest level since September 3.

The precious metal was able to rise after a previous fall to the level of $1,780.60. The main support for gold came from the US inflation data which cast a shadow on further policy of the Fed. Another bullish factor for gold is a persistent risk of coronavirus which causes uneven economic recovery.

The next major report, which may affect the price of gold, will be published on Thursday. The market expects the data on retail sales in the US for August.

In the meantime, the yellow metal needs to maintain its current position. This morning, the asset is desperately struggling to stay above the psychologically important level of $1,800. The US dollar, which is recovering from the fall on Tuesday, puts additional pressure on the quotes.

A similar situation is observed in the silver market. On Wednesday, the metal is also trying to stay afloat, while on Tuesday it showed a confident rise. Silver quotes rose by 0.4% to $23.89.

At the same time, other popular metals closed the day lower. Copper prices fell by 1.1% to $4.32, platinum slipped by 2% to $938.70, and palladium dropped the most, plunging by 5% to $1,975.60.

In monetary terms, yesterday's losses of palladium amounted to more than $100. The metal closed at its lowest level since July last year. It has been depreciating for six sessions in a row. Compared to the May highs, its value has decreased by 34% so far.

The global shortage of semiconductors in the automotive sector continues to affect the dynamics of palladium. The lack of materials slowed the pace of production. Accordingly, the demand for metals used in the automotive industry has also decreased which affects their current value.