NEW YORK: Gold prices jumped on Wednesday after tame US consumer price data eased fears that the Federal Reserve would taper its economic support sooner than expected.

Spot gold rose 1.4% to $1,752.46 per ounce by 2:07 p.m. EDT (1807 GMT). US gold futures settled up 1.2% at $1,753.30.

A strong US jobs report last week hammered bullion and kept it well below the key $1,800 mark as investors worried the Fed might taper soon.

But data on Wednesday showed the US consumer price index in July rose in line with expectations, which eased those concerns and buoyed gold, said Phillip Streible, chief market strategist at Blue Line Futures in Chicago.

“An inflation number that’s in line leaves the Fed scratching their heads and has them more on a wait-and-see-and-interpret-more-data type of approach.”

“The gold market is not going back up ‘til $1,835, but I don’t think the bottom is going to fall out yet,” he added.

Further boosting gold, the dollar fell from its highest in more than four months and US Treasury yields slipped, reducing the opportunity cost of holding non-interest bearing gold.

Michael Matousek, head trader at US Global Investors, noted that inflation remained at a 13-year high on a yearly basis in July, and said persistent inflation could drive gold’s price higher even in the face of an interest rate hike.

“Initially when people hear about rate hikes, they don’t want to own gold because they think that’s going to stop inflation, but inflation is like a freight train, once it gets going, it’s very difficult to turn it around.”