Gold Pulls Back from Three-Month High Amid Elevated Interest Rate Expectations

Gold prices have pulled back from their three-month high of $4,696.18, but this slight correction does not change the overall bullish trend in the market.

The recent decline was triggered by U.S. inflation data, which showed a 3.7% year-over-year increase in the Personal Consumption Expenditures (PCE) price index and a core PCE of 3.3% year-over-year.

This indicates that the Federal Reserve may need to keep interest rates at restrictive levels for an extended period, with a 35% probability of a rate hike in September and nearly 75% for December.

Despite this, gold has managed to stay above $4,500 due to medium-to-long-term buying demand and structural support from fiscal risks and official sector gold purchases.