Gold Prices Stabilize Amid Caution Ahead of Key Inflation Data
Gold prices have stabilized after a monthly decline of over 5%, but market sentiment remains cautious ahead of tonight's US Personal Consumption Expenditures (PCE) data release. The Federal Reserve's subsequent monetary policy path and gold's near-term direction will be influenced by the PCE reading, which is seen as a key variable for gauging inflation.
The spot price of gold rose 0.3% to $4,193.70 per ounce on Wednesday, but the monthly downtrend remains intact. The US dollar extended its strength, raising the cost of gold purchases for non-dollar investors and capping gold's rebound potential.
New York Fed President John Williams stated that policymakers may need only one more rate hike this year to bring inflation back to the 2% target, further pressuring gold prices. Traders are assigning a 47% probability of a rate hike at the Fed's October meeting and a 91% probability for December.