Gold Price Edges Lower Near $4,400 Amid Iran-US Tensions and Tame US Inflation

The price of gold is holding steady near $4,400 as investors weigh the impact of escalating tensions between the US and Iran against tame inflation data from the US.

A senior Iranian official stated that there has been no progress in talks to revive a permanent end to the war in the Gulf, weighing on gold prices. However, a lower-than-expected reading of US inflation data eased pressure on the Federal Reserve to raise interest rates soon, potentially limiting gold's losses.

The latest Consumer Price Index (CPI) inflation data showed a 3.4% year-over-year increase in July, down from 3.5% in June. This led to a decrease in expectations of a September Fed rate hike, with interest-rate swaps pricing in nearly a 40.1% chance of a hike.

TD Securities noted that precious metals maintain upside as the latest US CPI release did little to reignite Fed hike pricing. Technical analysis suggests gold is still bullish, but increasingly stretched, with the Relative Strength Index (14) flirting with overbought territory.