Spot gold remains near mid-May highs as traders await July PCE inflation figures and Fed commentary for rate cues.
Spot gold held near its highest level since mid-May, trading little changed as markets awaited the July PCE price index, the Federal Reserve’s preferred inflation gauge. The metal’s resilience suggests traders are positioning for potential upside if inflation data comes in softer than expected, reducing pressure on real yields.
Tuesday’s gains extended a rally triggered by the US Treasury’s bond buyback announcement last week, which stoked concerns over fiscal sustainability. A dovish or balanced tone from Fed official Kevin Warsh at Friday’s Jackson Hole symposium could further support gold by reinforcing expectations for lower rates.
Easing Middle East tensions, including resumed talks between Iran and Oman, have weighed on oil prices, potentially complicating the inflation outlook. Lower energy costs may ease headline price pressures, adding another layer to gold’s near-term trajectory.