Gold prices steadied during Asian trade on Thursday, consolidating near record highs as traders awaited the release of US consumer inflation data, which could set the tone for the Federal Reserve’s next policy moves.
By 3:45 pm AEST (5:45 am GMT), spot gold was down $12.39, or 0.3%, at $3,628.06 per ounce.
The metal hovered just below its all-time peak of $3,675, reached earlier in the week, after rebounding strongly in the prior session.
The August U.S. consumer price index (CPI), due Thursday, is expected to be pivotal in shaping expectations for Fed policy.
Markets currently price in a 92% probability of a 25 basis-point cut and an 8% chance of a larger 50 basis-point move at next week’s meeting, according to CME Group FedWatch Tool.
Markets expect annual headline CPI to rise 2.9% in August, up from 2.7% in July. Core CPI is seen climbing 3.1% year-on-year, unchanged from July’s pace.
On a monthly basis, both headline and core CPI are forecast to increase 0.3%.
The CPI release follows a weaker-than-anticipated producer price index (PPI) report. The PPI for final demand slipped 0.1% in August after a revised 0.7% gain in July.
On an annual basis, producer inflation slowed to 2.6% from a revised 3.1% in July.
Softer PPI data added to downward pressure on the dollar, already under strain from President Trump’s renewed criticism of Fed Chair Jerome Powell.
Geopolitical risks also bolstered gold demand. Traders cited heightened concerns after suspected Russian drones crossed into Polish airspace during strikes on western Ukraine and following Israeli attacks on Hamas leadership in Doha, Qatar.
