Gold Retreats from Three-Month Peak Ahead of Key Inflation Data

Gold retreated from its three-month peak on Wednesday as traders awaited crucial inflation data and Federal Reserve Chair Kevin Warsh's speech at the Jackson Hole symposium. Spot gold fell 0.3 percent to $4,642.74 per ounce after climbing to its highest level since mid-May.

The recent rally was driven by the US Treasury's expanded bond buyback program, which pressured yields and supported the non-yielding metal. Traders are pricing in a 61.6 percent chance that the Fed will hold rates steady in September, according to the CME FedWatch Tool.

Financial markets strategist lead at Exness, Wael Makarem, said a softer-than-expected inflation print would likely reinforce expectations for lower real yields and reduce the opportunity cost of holding gold. He added that a renewed deterioration in confidence around US fiscal sustainability could also prove important for the metal.