Gold Stalls as US Inflation Eases Hike Fears

Gold prices steadied near their highest level in over two months on Thursday, after a rally fueled by cooling US inflation. Spot gold was little changed at $4,408.55 per ounce, having earlier jumped about 1% to its highest since June 5. US gold futures for December delivery were steady at $4,467.

Traders appeared content to wait for confirmation from the upcoming Producer Price Index (PPI) data before committing to the next leg higher, according to Tim Waterer, chief market analyst at KCM Trade. He noted that gold was in consolidation mode after its post-Consumer Price Index gains.

The US Consumer Price Index rose 3.4% in the 12 months through July, down from 3.5% in June, which reduced the urgency for Federal Reserve policymakers to raise interest rates next month. Traders are now pricing in only a 40% chance of an interest rate hike at the Fed's September meeting, down from about 54% seen a week before.