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Gold slips as traders trim risk ahead of US PCE inflation data

XAU/USD was last around $4,615, after Tuesday’s high of $4,697, as expectations point to easing headline and stable core PCE inflation.

Reported · Written up by our desk · Major Pairs

Gold edged lower on Wednesday, with buyers trimming exposure ahead of the US Personal Consumption Expenditures Price Index report scheduled for 12:30 GMT, FXStreet reported. At the time of writing, XAU/USD traded around $4,615 after hitting $4,697 on Tuesday, the highest level since May 14.

Markets are focused on the Fed’s preferred inflation gauge, with expectations for headline PCE inflation to ease to 3.6% year over year in July from 3.7% in June. Core PCE inflation is forecast to hold at 3.3% year over year, while the headline index is expected to rise 0.1% month over month after a 0.1% decline in June, and core is expected to increase 0.2% after 0.1%.

FXStreet noted that traders will also watch additional US data alongside PCE, including the preliminary second quarter GDP estimate, Durable Goods Orders, and Personal Income and Spending, which could influence expectations for the next Fed policy move. The report also highlighted that markets were pricing a 64% chance the central bank keeps borrowing costs unchanged at its September meeting, using the CME FedWatch Tool.

Meanwhile, the US Dollar firmed modestly, weighing on dollar-denominated gold, with the US Dollar Index trading around 99.00, up about 0.12% on the day. Separately, the piece pointed to renewed debate over US fiscal credibility following increased buybacks of longer-dated Treasuries, while it also referenced oil weakness and comments from an Iranian deputy foreign minister regarding the Strait of Hormuz.

Latest closeGold $4,432.00 ▲1.6%|Dollar index 99.64 ▼0.3%

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