Gold prices edged higher on Thursday, recovering from a decline triggered by the release of US inflation data. July's inflation rate in the US rose by 0.2% MoM, aligning with market expectations, which in turn influenced forecasts for the Fed's September interest rate cut.
Markets trimmed expectations of a 50 basis point rate cut to a 25 basis point reduction, potentially limiting gold's upside in the short term.
Attention now turns to upcoming US economic data, including retail sales, jobless claims, and manufacturing index. A weak retail sales report could amplify recession fears, possibly supporting gold prices as the US dollar weakens.
Gold could continue to benefit from its status as a safe-haven asset amid rising tensions in the Middle East, especially with concerns about potential Iranian retaliation.
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