XAU/USD dips to $4,615 ahead of July PCE report, which may influence Fed rate expectations and gold’s near-term trend.
Gold prices slipped on Wednesday as investors reduced exposure before the release of the US Personal Consumption Expenditures (PCE) Price Index. XAU/USD traded near $4,615 after hitting a two-month high of $4,697 on Tuesday.
The Fed’s preferred inflation gauge is expected to show headline PCE easing to 3.6% year-over-year in July from 3.7% in June, while core PCE is forecast to remain steady at 3.3%. Monthly headline PCE is projected to rise 0.1%, reversing June’s 0.1% decline, with core PCE up 0.2%.
Markets are pricing a 64% chance of no Fed rate hike in September, per the CME FedWatch Tool. A softer inflation print could further reduce hike bets, potentially supporting gold, which benefits from lower interest rates.