Gold Steadies as Traders Eye Producer Price Index
Gold steadied near its two-month high on Thursday after a rally fueled by cooling US inflation data. Spot gold was little changed at $4,408.55 per ounce, while US gold futures for December delivery were steady at $4,467.
The Fed's September meeting is now less likely to see interest rate hikes, with traders dialling back expectations to 40% from 54% a week prior. Lower rates tend to support gold by reducing the opportunity cost of holding non-yielding assets.
Traders are waiting for confirmation on price pressures from the upcoming producer price index data, which is expected later in the day. The CPI rose 3.4% in the 12 months through July, down from 3.5% in June, according to the Bureau of Labor Statistics.
KCM Trade's chief market analyst Tim Waterer said: 'Gold is in consolidation mode today after its post-consumer price index gains, with near-term expectations of a Fed rate hike being dialled back another notch.'