Gold Prices Dip as Investors Eye Key Inflation Data

Gold prices dropped on Wednesday to $4,642.74 per ounce, a 0.3% decrease from the previous day's high, as investors awaited key U.S. inflation data for clues about the Federal Reserve's interest-rate path.

The recent surge in gold prices, which reached a three-month high earlier this week, was driven by strong gains last week following the U.S. Treasury's announcement to buy back government bonds.

Investors are closely watching the release of the U.S. Personal Consumption Expenditures (PCE) Price Index for July at 12:30 GMT, which is the Federal Reserve's preferred measure of inflation.

According to Wail Makarem, Head of Financial Markets Strategy at Exness, gold would benefit most from lower-than-expected inflation data combined with a dovish or balanced message from Federal Reserve Chair Kevin Warsh.