Spot gold rose 0.7% to $4,209.71 per ounce after US Personal Consumption Expenditures inflation data came in cooler than expected at 2.6% annually.
The softer inflation reading weakened the US dollar and reduced market pricing for an October Federal Reserve interest rate hike to roughly 37%.
Despite Wednesday's gains, gold prices remained down 5.4% for September as broader global yields continued to pressure non-yielding assets.