Gold Holds Firm Near $4,350 Amid Weaker US Inflation Data
Gold prices held steady near $4,350 as the US Producer Price Index (PPI) came in lower than expected, reducing the likelihood of a Federal Reserve interest rate hike in September. The PPI rose by zero percent from the previous month, down from the anticipated rise of 0.2 percent.
The disappointing inflation data led to a 15% drop in expectations for a September Fed hike from 50% to 35%. This decline in hawkish sentiment is bullish for gold, as lower interest rates can reduce the opportunity cost of holding non-yielding assets like gold.
Gold has been on an upward trend since July, driven by weak employment data and softer inflation. The metal reached a two-month high of $4,449.39 on Thursday before experiencing some profit-taking, which pushed spot gold down to $4,354.58.