Gold holds near $4,400 ahead of US inflation data

Gold has remained virtually unchanged near $4,400, indicating that traders are hesitant to make moves before two key inflation reports, rather than any clear trend. A notable divergence exists between a Reuters survey of economists, who expect the Fed to keep rates unchanged until at least the end of the year, and the CME FedWatch Tool, which shows a 60% chance of a rate increase this month. This disagreement could lead to significant price adjustments after the data is released.

The safe-haven demand for gold has been a minor factor in its price movement this year, as the metal has already risen sharply due to other catalysts. Consequently, today's news about US-Iran tensions and a probable ECB rate hike will likely have a greater impact on the dollar and interest rate expectations than on a new surge into gold. Ongoing purchases by central banks continue to provide a solid foundation for gold, arguably more so than safe-haven flows.

Gold is moving sideways around $4,400 as the market awaits inflation data that may resolve the debate on whether the Fed will raise rates or maintain them.

Key points:

• According to Reuters, spot gold was nearly unchanged at $4,400 per ounce during early Asian trade on Thursday.
• The US producer price index is scheduled for release at 1230 GMT (8:30 am Eastern), and consumer inflation figures will follow on Friday.
• A Reuters poll indicates that most economists expect the Fed to hold rates steady at its September 15-16 meeting and for the remainder of the year, in contrast to the CME FedWatch Tool, which currently gives a 60% probability of a rate hike this month.
• Higher rates typically make non-yielding assets like gold less attractive.
• The European Central Bank is expected to raise rates on Thursday for the second time this year, aiming to curb inflation resulting from the Iran war.
• The conflict between the US and Iran continues to intensify, but gold's safe-haven role has been a relatively small factor in its price movement this year compared to other influences.

Gold prices saw minimal change in early Asian trade on Thursday, per Reuters, as investors refrained from acting before crucial inflation data that could influence US interest rate policy. Spot gold remained near $4,400 per ounce, with traders avoiding new positions ahead of the reports.

The US producer price index is due at 1230 GMT (8:30 am Eastern), and consumer inflation data will come out on Friday. Both releases are expected to significantly affect the Federal Reserve's decision at its meeting later this month. The outlook remains uncertain. A Reuters poll shows a majority of economists expect the Fed to keep rates unchanged at its September 15-16 meeting and for the rest of the year, again contradicting market expectations for further tightening. This contrasts with the CME FedWatch Tool, which currently indicates a 60% chance of a rate increase this month, highlighting the divided opinions ahead of the data. Higher interest rates tend to reduce the appeal of non-yielding assets like gold.

Also drawing attention today is the European Central Bank, which is poised to raise rates for the second time this year to combat an energy-driven inflation surge linked to the Iran war, according to Reuters. The ongoing US-Iran conflict continues to intensify, a situation that has occasionally supported gold this year, but its safe-haven role has arguably been a secondary driver of the metal's 2026 performance behind dollar movements, central bank purchases, and changing rate expectations. With so much data and policy action occurring in a short period, today's producer price data may provide more clarity on the rate path than any single headline from the Middle East.