Gold prices were little changed on Wednesday after hitting their highest level in more than three months in the previous session, as investors awaited key U.S. inflation data to assess the outlook for interest rates.
By 01:50 GMT, spot gold was little changed at $4,652.39 per ounce. Prices rose on Tuesday to their highest level since mid-May, following sharp gains last week after the U.S. Treasury announced plans to buy back bonds. U.S. gold futures rose 0.3% to $4,709.20.
The U.S. Personal Consumption Expenditures (PCE) Price Index for July, the Federal Reserve’s preferred measure of inflation, is due at 12:30 GMT. Investors will also closely watch Federal Reserve Chair Kevin Warsh’s speech on Friday at the central bank’s Jackson Hole symposium.
“For gold, the most supportive outcome would be weaker-than-expected inflation, coupled with a dovish or balanced message from Warsh,” said Wael Makarem, head of capital markets strategy at Exness. Such an outcome would reinforce expectations of lower real yields and reduce the opportunity cost of holding a non-yielding asset, he said.
Makarem added that renewed concerns over the sustainability of U.S. fiscal conditions could also support gold, particularly amid the Treasury’s recent bond-buyback plans and their impact.
According to CME Group’s FedWatch Tool, traders see a 63.6% probability that the Federal Reserve will leave interest rates unchanged next month.
On the geopolitical front, Iran said it had resumed talks with Oman on managing the Strait of Hormuz, contributing to a decline in oil prices.
International Monetary Fund Managing Director Kristalina Georgieva said the global economy was weathering the energy shock caused by the war in Iran better than expected, while expressing concern about deteriorating fiscal conditions in some countries.
Among other precious metals, spot silver rose 0.7% to $69.09 an ounce, platinum gained 0.6% to $1,869.22, and palladium advanced 1.4% to $1,345.30.
Source: Reuters
