Gold Retreats from Two-Month High as Traders Await Crucial PPI Data

Gold prices retreated on Tuesday as investors grew cautious ahead of the release of the latest US Producer Price Index (PPI) data, which could offer fresh clues on the Federal Reserve's monetary policy path.

The precious metal had rallied on expectations of a Fed rate cut, but its price slipped as the dollar firmed and Treasury yields inched higher. Spot gold was trading around $2,360 per ounce, down roughly 0.5% from the previous session's peak, which marked the highest level since mid-April.

The PPI report is a key input for the Fed's interest rate decisions, and its outcome could set the tone for the precious metal in the near term. A hotter-than-expected reading could dampen hopes for an imminent rate cut, strengthening the dollar and pressuring gold prices, while a cool number could revive rate-cut bets.