Gold Struggles as US Dollar Firms After PCE Data Release

Gold's price has been struggling to break above $4,600 as the US Dollar firmness continues after the release of the latest US PCE data. The data showed that inflation remains sticky and well above the Federal Reserve's target, leading to a modest recovery in the Greenback.

The precious metal had reached an intraday high of $4,643 earlier today but has since reversed its gains and is now trading around $4,577. This comes as the Fed's interest rate path remains uncertain, with buyers seemingly hesitant to chase prices higher.

According to CME FedWatch Tool, markets currently see a near 62% chance that the central bank will keep borrowing costs unchanged in September. However, Kansas City Fed President Jeff Schmid emphasized the need for the Fed to return inflation to its target of 2%, while Chicago Fed President Austan Goolsbee expressed concerns over the current 'low hire and low fire' labour market.

Traders are now looking ahead to Fed Chair Kevin Warsh's speech at the Jackson Hole Symposium on Friday for greater clarity on the interest rate outlook. Middle East tensions also remain an important factor, with elevated energy prices posing upside risks to inflation.