Gold prices rose Wednesday, helped by cooler-than-expected inflation data that strengthened investors' conviction the Federal Reserve will start cutting interest rates by September.

Spot gold was up 0.5% to $3,337.49 an ounce as of 0909 ET (1309 GMT) after rising as much as 1% earlier in the session. U.S. gold futures rose 0.5% to $3,358.80.

Data showed the Consumer Price Index increased 0.1% last month after rising 0.2% in April. In the 12 months through May, the CPI advanced 2.4% after gaining 2.3% in April.

Economists polled by Reuters had forecast CPI climbing 0.2% and increasing 2.5% year-on-year.

"The surprise low print in core CPI has goosed the entire precious metals complex higher as yields and the dollar fall. The hope is that it will bring a Fed cut that much sooner," said Tai Wong, an independent metals trader.

Traders are currently pricing in a 68% chance of an interest rate cut in September by the U.S. central bank, according to CME FedWatch tool.

On the trade front, U.S. President Donald Trump said the U.S. deal with China is done, with Beijing to supply magnets and rare earth minerals, while the U.S. will allow Chinese students at its colleges and universities. Trump said the deal is subject to final approval by him and President Xi Jinping.

The market's focus is now on the U.S. Producer Price Index data, due on Thursday before the Fed's June 17-18 meeting.

"The market will want to see gold and silver take out recent highs, $3,403 and $36.90 respectively, as a signal to charge higher. If we don't rally strongly on surprisingly good data, then it may signal a short-term correction," Wong added.

Spot silver eased 0.7% to $36.32 per ounce. Platinum rose 3.8% to $1,268.12, its highest level since 2021. Palladium added 1.1% to $1,072.25.