Gold prices remained stable on Wednesday as investors awaited the release of the U.S. Consumer Price Index (CPI) data, which will provide insight into the Federal Reserve's monetary policy stance. Spot gold held at $4,159.45 per ounce, while U.S. gold futures for December delivery saw a slight 0.1% increase to $4,182.60.
Ilya Spivak, head of global macro at Tastylive, noted that gold's ability to hold its range despite a rally in oil prices suggests a potential upward movement. Geopolitical tensions also played a role, as an administrative building of Saudi Aramco in Dhahran was attacked, escalating the conflict between Yemen's Houthis and Saudi Arabia, which drove oil prices higher.
If upcoming economic data, including CPI, Producer Price Index (PPI), and retail sales figures, indicate weaker economic momentum, markets may reduce expectations for further Fed rate hikes, potentially boosting gold prices, Spivak added. The CPI report is set for release at 1230 GMT, with PPI and retail sales data following on Thursday.
New York Fed President John Williams reiterated the possibility of another interest rate hike this year to combat inflation. Meanwhile, Fed Governor Christopher Waller suggested that rising U.S. bond yields reflect stronger economic growth rather than higher inflation expectations. Markets currently assign a 23% chance of a rate hike this month and an 88% probability for December, according to CME's FedWatch Tool.
Among other precious metals, spot silver dropped 0.6% to $59.11 per ounce, platinum remained steady at $1,664.19, and palladium climbed 0.4% to $1,130.81.