Gold steady near $4,400 awaiting inflation data

Gold prices held steady near $4,400 on Thursday, with a softer U.S. dollar providing a cushion against elevated Treasury yields. Investors are closely watching upcoming U.S. inflation data, which is expected to heavily influence the Federal Reserve's interest rate decision later this month. Spot gold traded near $4,400 an ounce as traders awaited the release of the U.S. Producer Price Index (PPI) on Thursday and the Consumer Price Index (CPI) on Friday. These reports are anticipated to offer crucial insights into inflationary pressures and guide expectations for the Federal Reserve's policy meeting on September 15-16. Markets are currently pricing in approximately a 60% to 65% probability of a quarter-point interest rate increase by the Federal Reserve. This pricing was bolstered by recent better-than-expected U.S. Nonfarm Payrolls data. However, a divergence exists between market pricing and a Reuters poll of economists, which suggests the Fed may hold rates steady through year-end, creating potential for significant market repricing once the inflation figures are released.