Gold Retreats as Traders Await Producer Price Report Clues
Gold prices retreated on Thursday after touching a more than two-month high, as traders took a breather following last week's cooling US inflation data. Spot gold fell 0.5% to $4,383.53 per ounce by 0601 GMT, while US gold futures for December delivery declined 0.6% to $4,440.80.
The recent rally in gold prices was fueled by traders scaling back bets on US interest rate hikes amid softer economic data. However, with the upcoming producer price report set to provide more clarity on inflation prospects, traders are now holding off on committing to further gains.
'Gold is in consolidation mode today after its post-CPI gains, with near-term expectations of a Fed rate hike being dialed back another notch,' said Tim Waterer, chief market analyst at KCM Trade. 'Traders appear content to wait for confirmation from the upcoming PPI data before committing to the next leg higher.'
The consumer price index rose 3.4% in the 12 months through July, down from 3.5% in June, aligning with economists' expectations. As a result, traders are now pricing in only a 40% chance of a hike at the September meeting, down from about 54% seen a week before.