Gold Edges Lower Ahead of Crucial US Inflation Data

Gold prices have pulled back slightly as buyers take profits ahead of the US Personal Consumption Expenditures (PCE) Price Index data, due out at 12:30 GMT. The PCE is the Federal Reserve's preferred inflation gauge and a key indicator for interest rate decisions.

The market expects the headline PCE to ease to 3.6% year-over-year in July from 3.7% in June, while core PCE is forecast to hold steady at 3.3%. The data will be closely watched and could determine whether gold resumes its recovery or loses momentum.

The US Dollar has firmed modestly on Wednesday, weighing on dollar-denominated gold, but remains pinned near its recent lows after last week's sell-off. The return of the currency-debasement narrative has renewed demand for gold.