XAU/USD retreats 0.52% to $4,386 as traders take profits before key US inflation figures due later Thursday.
Gold prices fell on Thursday, reversing gains after hitting a two-month high of $4,449 earlier in the session. The precious metal traded near $4,386, down 0.52% as profit-taking weighed on sentiment amid cautious trading ahead of US Producer Price Index data.
The pullback follows a rally driven by softer US economic data, including a weaker-than-expected Nonfarm Payrolls report and a broadly in-line Consumer Price Index for July. These releases reduced expectations for a Federal Reserve rate hike in September, with markets now pricing a 36% chance, down from 54% a week ago.
US Treasury yields extended declines for a third day, potentially limiting gold’s downside. Analysts suggest the Fed is likely to hold rates in September but warn that further scaling back of hike expectations may be premature.