Gold holds steady ahead of US inflation data

December gold futures settled at $3,682 an ounce

Gold prices were little changed at Wednesday’s close as investors awaited US consumer inflation data, following an unexpected decline in producer prices in August in the world’s largest economy.

December gold futures settled at $3,682 an ounce, after rising 0.13% in the previous session.

Data released earlier showed the US producer price index (PPI) unexpectedly contracted in August as service costs fell, following last week’s jobs report that pointed to a sharp slowdown in the labor market.

Taken together, the data strengthened expectations that the Federal Reserve will resume interest rate cuts at next week’s policy meeting. According to the CME FedWatch tool, markets are pricing in a nearly 90% chance of a 25-basis-point cut.

Attention now turns to Thursday’s consumer price index (CPI) reading, seen as critical for the Fed’s policy outlook, with annual inflation expected to accelerate to 2.9% from 2.7% in July.