Gold Prices Steady as Investors Await Inflation Data for Fed Clues

Gold prices steadied on Tuesday after reaching a two-month high earlier in the session. The precious metal was trading at $4,386.13 per ounce by 1135 GMT, having hit its highest level since June 5 at $4,434.84.

Investors are waiting for US inflation data due out on Wednesday and producer price data on Thursday to gauge the Federal Reserve's interest-rate path.

According to climate and commodities economist Hamad Hussain, a hotter-than-expected inflation print could justify an interest rate hike at the Fed's next meeting, putting downward pressure on gold prices. Currently, traders are pricing a 48% chance of an interest-rate hike in September, up from 44% on Monday.

The precious-metals outlook is showing signs of improvement, with ongoing structural demand and a more supportive macro environment contributing to this trend. However, as a non-yielding asset, gold loses its appeal in a high-interest-rate environment.