FX.co ★ Gold Steady on Fed Rate Outlook

Gold prices stabilized around $3,350 per ounce on Wednesday, as investors assessed the Federal Reserve’s interest rate outlook in light of the latest Consumer Price Index (CPI) data. July's headline inflation registered at 2.7%, slightly below the anticipated 2.8%, while core inflation increased to 3.1% from 2.9%, mitigating worries about tariff-induced inflation. This development bolstered expectations for a 25 basis points rate cut by the Fed in September, enhancing the attractiveness of non-yielding gold. Market participants now focus on the upcoming Producer Price Index (PPI), weekly jobless claims, and retail sales figures. In the meantime, traders seek clarity on the tariff status of gold imports amid mixed messages. On Monday, President Trump announced there would be no tariff, but last week the Customs and Border Protection surprised markets by categorizing 1-kilo and 100-ounce gold bars under a customs code that subjects them to tariffs. Additionally, the U.S. extended its tariff truce with China by 90 days, reducing tensions, while investors anticipate U.S.–Russia discussions aimed at resolving the conflict in Ukraine.