Gold holds low as investors brace for U.S. inflation data

Gold prices hovered near one-month lows today as investors await U.S. inflation data due to be released at 20:30 tonight.

The market expects CPI data to show a slight acceleration in inflation in July.

Christopher Wong, Executive Director and FX Strategist at OCBC Bank, said: “Although the market generally expects the headline CPI to rebound in the annual rate, the focus remains on the core CPI. Any downward headwinds that are larger than expected may help strengthen the slowdown in inflation. And provide some support for gold prices.”

Wong added that when the market sees a more likely rate cut and a weaker dollar, the outlook for gold will brighten again. And that depends on how firm the slowdown in inflation is.