Gold prices firmed on Thursday after a more than 1% drop in the previous session, with market focus turning to comments from U.S. Federal Reserve Chair Kevin Warsh this week.
Spot gold was up 0.5% at $4,615.27 per ounce, as of 0032 GMT. Prices fell on Wednesday after data showed that U.S. inflation remains elevated.
U.S. gold futures rose 0.4% to $4,669.50.
Annual U.S. inflation unexpectedly held steady in July, well above the Federal Reserve’s 2% target for the 65th straight month, and the pause in the decline from a recent Iran-war-induced peak is likely to add to the central bank’s tense debate over whether interest rates should be lifted or held steady.
Markets are assigning a 36.5% probability to a September U.S. rate hike and a 72.7% chance by December, according to the CME FedWatch Tool.
Gold, which pays no interest, tends to become less attractive when interest rates are high.
Fed’s Warsh is set to speak on Friday at the central bank’s Jackson Hole symposium.
On the geopolitical front, Qatar’s prime minister will visit Tehran in an effort to relaunch diplomacy after the U.S. and Iran traded recriminations over Washington’s promise to increase economic pressure on Tehran by targeting its trade partners for sanctions.
Among other metals, spot silver gained 1% to $68.77, platinum rose 0.7% to $1,842.88 and palladium firmed 0.3% to $1,332.34.
Elsewhere, South Africa’s mining firms are accelerating investment in renewable energy as they seek to diversify power sources, cut costs and meet decarbonisation targets, marking a shift after decades of reliance on state utility Eskom.
