Gold Prices Ease as Investors Await Key US Inflation Data
Gold prices eased on Wednesday after reaching a three-month high in the previous session. The precious metal lost 0.3% to $4,642.74 per ounce as investors awaited key US inflation data. This comes after a four-day rally that saw gold climb to its highest level since mid-May.
The upcoming US Personal Consumption Expenditures (PCE) price index for July is set to be released at 1230 GMT and will give insight into the US Federal Reserve's interest-rate path. A dovish or balanced message from Fed chairman Kevin Warsh at the Jackson Hole symposium on Friday could reinforce expectations for lower real yields, making gold more attractive.
Financial markets strategists lead at Exness, Wael Makarem, noted that a softer-than-expected inflation reading combined with a dovish message from Warsh would be supportive of gold prices. He also mentioned the recent Treasury buyback plans and their impact on the opportunity cost of holding non-yielding assets.
On the geopolitical front, oil prices fell as Iran said it had restarted talks with neighbour Oman to manage the Strait of Hormuz. This development was seen as a positive for the global economy, which has weathered the energy shock better than feared, according to International Monetary Fund managing director Kristalina Georgieva.