Gold price back above $1,800 on US inflation data miss

Gold pared earlier losses and rose above the $1,800 level once again after the latest US inflation data came in slightly lower than expected, which may ease fears that the Federal Reserve will be forced to taper its bond buying soon.

Spot gold gained 0.6% by 11:40 a.m. EDT, trading at a near one-week high of $1,806.10 per ounce. US gold futures were up 0.7% at $1,807.90 per ounce.

The US Labor Department said on Tuesday its Consumer Price Index (CPI), excluding the volatile food and energy components, edged up 0.1% in August, short of the 0.3% forecast by economists. This was the smallest gain since February, following a 0.3% rise in July.