Gold prices edged higher during Asian trading on Thursday, recovering slightly from a 1.4% decline in the previous session as investors shifted their focus to Fed Chair Kevin Warsh's speech at the annual Jackson Hole Symposium.
By 4:15 pm AEST (6:15 am GMT), spot gold was up 0.3% at US$4,606.07 an ounce.
Overnight, the headline personal consumption expenditures (PCE) price index rose 0.2% on a seasonally adjusted basis in July, taking annual inflation to 3.7%, according to the Commerce Department.
Markets had expected monthly growth of 0.1% and an annual rate of 3.6%.
Meanwhile, core PCE increased 0.2% for the month and 3.3% annually, both in line with forecasts.
The CME Group FedWatch Tool showed a probability of 63.9% that the Federal Reserve will keep interest rates unchanged next month, with market expectations little changed following the PCE release.
Renewed optimism over a potential reopening of the Strait of Hormuz, lower oil prices and stronger-than-expected earnings from artificial intelligence pioneer Nvidia have also reduced demand for the U.S. dollar as a safe-haven asset.
Meanwhile, Bloomberg reported late Wednesday that Iran's Islamic Revolutionary Guard Corps (IRGC) had reached a revenue-sharing agreement with Oman over the Strait of Hormuz, despite an ongoing standoff between Tehran and other parties over control of the crucial waterway.
Looking ahead, investors will closely monitor Fed Chair Kevin Warsh's speech at the annual Jackson Hole Symposium on Friday for clues on the central bank's monetary policy outlook.
