Gold retreats as traders await U.S. inflation data

August 25, 2025 (MLN): Spot gold was down 0.23% at $3,363.76 an ounce as of [10:59 am] PST, according to data reported by Mettis Global.

Gold prices slipped on Monday from a near two-week high as the U.S. dollar regained ground, though expectations of imminent U.S. interest rate cuts continued to underpin the precious metal.

U.S. gold futures fell 0.3% to $3,409.60.

The dollar index edged 0.2% higher against major peers after touching a four-week low, weighing on gold by making it more expensive for overseas buyers.

“There’s a decent level of support for gold around $3,350 over the near term, with Powell’s dovish hints allowing gold to carve out a prominent swing low on Friday,” said Matt Simpson, senior analyst at City Index to CNBC.

 “A sustained rally likely requires softer PCE inflation and weaker employment data going forward. But with inflation likely to remain elevated, gold’s gains could remain capped beyond the expected initial bounce.”

Federal Reserve Chair Jerome Powell signaled on Friday that the central bank may cut rates as early as its September 17 policy meeting, citing rising risks to the labor market even as inflation pressures persist.

While stressing that no decision had been finalized, his remarks boosted expectations of monetary easing.

Markets are pricing in an 87% probability of a quarter-point cut next month and roughly 48 basis points of reductions by year-end, according to the CME FedWatch Tool,

Gold, which yields no income, typically benefits in a low-rate environment as the opportunity cost of holding bullion decreases.

Asian equities rallied on Monday as investors welcomed the Fed’s dovish tilt.

Focus has now shifted to Friday’s U.S. personal consumption expenditures (PCE) report, expected to show core inflation rising to 2.9%, the highest since late 2023.

Among other precious metals, spot silver dipped 0.1% to $38.77 per ounce, platinum eased 0.4% to $1,356.39, and palladium declined 0.4% to $1,122.

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