Gold holds near three month high as markets await US inflation data – investingLive

Gold's ability to hold its recent gains without giving much back suggests the market is comfortable with its current positioning ahead of today's inflation print, rather than nervously unwinding into the event. The setup favours further upside if the PCE data comes in soft and Warsh strikes a balanced or dovish tone at Jackson Hole on Friday, since that combination would reinforce expectations for lower real yields and reduce the opportunity cost of holding a non-yielding asset like gold. Renewed concern about US fiscal sustainability, a theme already stirred by the Treasury's bond buyback intervention, is flagged as a further potential driver, one that could support gold even independent of the near term rate path. Separately, easing Middle East tensions, with Iran and Oman resuming talks over the Strait of Hormuz, have pulled oil prices lower, a dynamic that could complicate the inflation outlook gold traders are pricing given lower energy costs typically ease headline price pressures.
—
Gold isn't going anywhere in either direction until it sees today's inflation print and hears what Warsh has to say on Friday.
Summary:
Gold held broadly steady on Wednesday, consolidating after touching its highest level since mid-May in the previous session, as investors held back from placing fresh bets ahead of a closely watched US inflation report due later today.
Tuesday's move higher extended a sharp rally that began last week following the US Treasury's announcement of an expanded bond buyback programme, a step taken to calm a bond market sell off that had pushed long dated yields to multi decade highs. That episode has kept concerns about US fiscal sustainability in the background of gold's recent strength, alongside the more immediate driver of shifting interest rate expectations.
As covered in our earlier preview, today's release is the Personal Consumption Expenditures price index for July, the Federal Reserve's preferred inflation gauge, due at 12:30pm GMT. Markets are treating the data as a key input ahead of Fed Chair Kevin Warsh's keynote address at the Jackson Hole symposium on Friday, an appearance being closely watched for signals on the central bank's next move.
Analysts say the combination that would most support further gains in gold would be a softer than expected inflation print paired with a dovish or balanced message from Warsh, since that outcome would reinforce expectations for lower real yields and reduce the opportunity cost of holding an asset that pays no yield. Separately, any renewed deterioration in confidence around US fiscal sustainability, particularly linked to the ongoing effects of the Treasury's buyback plans, was also flagged as a factor that could support gold independent of the near term rate path.
The current setup follows a run of data earlier this month that already softened expectations for near term tightening, including an unexpected decline in nonfarm payrolls alongside a consumer inflation reading that came in broadly in line with forecasts. Traders are currently pricing in roughly a two in three chance that the Fed will leave interest rates unchanged at its next meeting, according to the CME FedWatch Tool, a backdrop that has generally supported gold in recent sessions.
On the geopolitical side, Iran said it has resumed talks with Oman aimed at managing the Strait of Hormuz, a development that sent oil prices lower and offered some tentative signs of de-escalation in a conflict that has otherwise remained a source of market uncertainty. For gold, a further easing in Middle East tensions could reduce safe haven demand at the margin, even as the metal's more immediate direction remains tied to today's inflation data and Friday's central bank commentary.
Most Popular
Sponsored
New home sales slump to 2021 lows, prices drop, inventory surges as buyers bail.
China orders Tesla recall of 3M vehicles over door handles, part of 4.3M safety campaign.
Nike's dividend yield nears 4% as stock plunges 77% from highs, but payout exceeds net income.
France's debt showdown drives 10-year yields above 4%, widening spreads and testing investor patience.
ECB hikes rates to 2.50% to tame inflation, but signals limited further moves.
Gas prices spike to €66/MWh as EU storage falls to 63%, threatening winter supply.
Live cattle futures fell $2.65, feeder cattle mixed, cash trade down $7-8, and pasture ratings dropped 2 points
Sponsored
Must Read
Featured Videos
Subscribe to our Daily News Wrap
High risk warning: Foreign exchange trading carries a high level of risk that may not be suitable for all investors. Leverage creates additional risk and loss exposure. Before you decide to trade foreign exchange, carefully consider your investment objectives, experience level, and risk tolerance. You could lose some or all your initial investment; do not invest money that you cannot afford to lose. Educate yourself on the risks associated with foreign exchange trading and seek advice from an independent financial or tax advisor if you have any questions.
Advisory warning: investingLive is not an investment advisor, investingLive provides references and links to selected news, blogs and other sources of economic and market information for informational purposes and as an educational service to its clients and prospects and does not endorse the opinions or recommendations of the blogs or other sources of information. Clients and prospects are advised to carefully consider the opinions and analysis offered in the blogs or other information sources in the context of the client or prospect's individual analysis and decision making. None of the blogs or other sources of information is to be considered as constituting a track record. Past performance is no guarantee of future results and investingLive specifically hereby acknowledges clients and prospects to carefully review all claims and representations made by advisors, bloggers, money managers and system vendors before investing any funds or opening an account with any Forex dealer. Any news, opinions, research, data, or other information contained within this website is provided on an "as-is" basis as a general market commentary and does not constitute investment or trading advice, and we do not purport to present the entire relevant or available public information with respect to a specific market or security. investingLive expressly disclaims any liability for any lost principal or profits which may arise directly or indirectly from the use of or reliance on such information, or with respect to any of the content presented within its website, nor its editorial choices.
Disclaimer: investingLive may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2026 Finance Magnates CY Limited — Part of Ultimate Group
Read our Terms, Cookies and Privacy Notice

source