Gold Retreats as Investors Await Inflation Data and Fed Clues

Gold prices retreated on Wednesday after reaching a more than three-month high in the previous session. The metal eased by 0.3% to $4,642.74 per ounce at 0410 GMT.

The price increase was largely driven by last week's sharp gains following the U.S. Treasury's bond buyback announcement. However, investors remained cautious ahead of a key U.S. inflation report and a speech from Federal Reserve Chairman Kevin Warsh.

For gold to continue its upward trend, Wael Makarem, financial markets strategist at Exness, believes that softer-than-expected inflation combined with a dovish message from Warsh would be the most supportive outcome. This would reinforce expectations for lower real yields and reduce the opportunity cost of holding non-yielding assets.

Meanwhile, the global economy has weathered the Iran war energy shock better than feared, according to International Monetary Fund Managing Director Kristalina Georgieva. However, she raised concerns about deteriorating fiscal conditions in some countries.