Gold Stabilizes Ahead of US Inflation Data and Iran Deal Developments

Gold prices steadied at around $4,370 an ounce on Wednesday as investors prepared for key US inflation data that could influence the Federal Reserve's policy outlook.

The markets remain divided over whether the Fed will raise interest rates by 25 basis points in September following July's unchanged rates, with rising oil prices reinforcing a hawkish bias.

Meanwhile, traders are assessing the prospects of a US-Iran deal to reopen the Strait of Hormuz amid shifting signals. Pakistan's defense minister said Washington and Tehran are 'close to some sort of arrangement' over the strait, while reports indicate that talks between Iran and Oman have reached an advanced stage.

Gold continued to benefit from investment demand and central bank purchases, particularly from China. China's central bank added about 20 tons to its reserves in July after buying around 15 tons in June, marking the largest monthly increase since October 2023.