Gold prices edged higher on Thursday, partially recovering from a drop of more than one per cent on Wednesday after US inflation data came in persistently above target.
Spot gold rose 0.5 per cent to $4,615.27 per ounce by 00:32 GMT. US gold futures gained 0.4 per cent to $4,669.50.
Wednesday’s decline followed data showing that annual inflation in the United States held unexpectedly steady in July at a level well above the Federal Reserve’s 2 per cent target, marking the sixty-fifth consecutive month above that threshold. The stall in disinflation, partly attributed to the inflationary impact of the Iran conflict, is expected to intensify debate within the Fed over whether to raise interest rates or hold them steady.
According to CME Group’s FedWatch tool, markets are pricing in a 36.5 per cent probability of a rate rise in September, rising to 72.7 per cent by December.
Gold, which yields no interest, typically loses appeal when rates are high. Investors are now watching for remarks from Fed Chair Kevin Warsh later this week for any clearer signal on the central bank’s next move.
