XAU/USD falls 1% to $4,365 after US PPI data signals cooling inflation but fails to sustain dollar weakness.
Gold (XAU/USD) declined 1% to $4,365 on Thursday as the US Dollar (USD) recovered from earlier losses, despite softer-than-expected US factory inflation. The drop followed a daily high of $4,449, as traders digested mixed economic signals.
US Producer Price Index (PPI) data showed a slowdown to 4.7% year-over-year in July, down from 5.5%, while core PPI met expectations at 4.2%. Unemployment claims rose to 209K, exceeding forecasts of 202K. Treasury yields dipped, with the 10-year yield down four basis points to 4.647%.
Market expectations for Federal Reserve policy shifted, with a 40% chance of a 25-basis-point rate hike and 60% odds of a hold, reflecting divided Fed sentiment.