Gold Steadies on Tame US Inflation Data

Gold prices steadied on Thursday after reaching over two-month highs following the release of tame US inflation data. The Consumer Price Index (CPI) rose 3.4% in the 12 months through July, down from 3.5% in June, according to the Bureau of Labor Statistics.

The data suggests that Fed policymakers will feel little fresh urgency to raise interest rates in September, which is good news for gold investors. Traders are now pricing in only a 40% chance of an interest rate hike at the Fed's September meeting, down from about 54% seen a week before.

Gold analyst Tim Waterer said that gold is 'in consolidation mode today after its post-consumer price index gains', with traders waiting for confirmation from the upcoming producer price index data before committing to the next leg higher. Expectations of lower rates tend to support gold by lowering the opportunity cost of holding the non-yielding asset.

Spot gold was little changed at $4,408.55 per ounce, while US gold futures for December delivery were steady at $4,467. Silver gained about 0.3% to $65.47 per ounce, while platinum and palladium lost 0.4% and 0.5%, respectively.