Gold rally takes a breather ahead of US inflation data
GLD•Gold eases as traders await U.S. inflation data and Fed signals
Aug. 26 (Reuters) - Gold prices eased on Wednesday, on track to snap a three-session winning streak, with focus shifting to U.S. inflation data due later in the day for signals on the Federal Reserve's interest rate path.
Spot gold XAU= fell 0.8% to $4,618.03 per ounce by 1114 GMT, after prices climbed to their highest since May 14 on Tuesday following the U.S. Treasury Department's recent bond buyback announcement.
U.S. gold futures GCcv1 dropped 0.4% to $4,673.90.
"Gold prices are subdued today as the rally looks technically stretched and markets adopt a cautious stance ahead of key events," said Nikos Tzabouras, senior market analyst at Jefferies-owned Tradu.com.
The U.S. Personal Consumption Expenditures (PCE) inflation report for July is due at 1230 GMT, along with Fed Chair Kevin Warsh's remarks at the Jackson Hole Symposium on Friday.
Soft producer and consumer inflation figures published this month lowered the probability of an interest rate hike in September. Traders are now pricing in about a 64% chance that the Fed will leave rates unchanged next month, according to the CME FedWatch Tool. FEDWATCH/
Gold often loses its appeal in a high-interest-rate environment due to its non-yielding characteristic.
"If Warsh remains tight-lipped about policy, then we may expect some renewed easing in the dollar and further interest in gold on the basis of uncertainty; if he is resolutely firm in his intentions, then gold may come under pressure," said Rhona O'Connell, head of market analysis at StoneX.
On the geopolitical front, Iran said it had restarted talks with neighbor Oman to manage the Strait of Hormuz as it faces heightened economic pressure from U.S. President Donald Trump in the wider conflict.
Meanwhile, China's net gold imports via Hong Kong in July rose about 11% from a month earlier, data showed on Tuesday, supported by an uptick in investment demand.
