XAU/USD dips as Middle East risks fuel inflation concerns but softer US CPI data eases Fed tightening expectations.
Gold prices retreated to around $4,400 in early Asian trading Thursday, pressured by escalating US-Iran tensions that stoke oil-driven inflation fears. The closure of the Strait of Hormuz and stalled negotiations over a Gulf conflict resolution added to market unease.
US July CPI data showed inflation cooling, with headline CPI rising 3.4% year-over-year, matching forecasts and down from 3.5% in June. Core CPI also eased to 2.5% from 2.6%, reinforcing expectations the Federal Reserve may delay further rate hikes.
The mixed drivers left gold vulnerable to downside but limited losses, as lower rates reduce the opportunity cost of holding non-yielding assets.