Gold Prices Retreat Amid Cooling Inflation Bets
Gold prices retreated on Thursday after touching a two-month high earlier in the session as traders paused to assess the impact of cooling US inflation. The consumer price index rose 3.4% in the 12 months through July, down from 3.5% in June.
The FedWatch Tool indicates that traders are now pricing in only a 40% chance of a rate hike at the September meeting, down from about 54% seen a week before. This drop in interest rate hike expectations has contributed to gold's recent surge, which has risen over 8% so far this month.
'Gold is in consolidation mode today after its post-CPI gains,' said Tim Waterer, chief market analyst at KCM Trade. 'Traders appear content to wait for confirmation from the upcoming PPI data before committing to the next leg higher.'