The price of gold rose by about 0.15%, while market participants are preparing for the release of the next US inflation data, which may provide clues about the Fed's actions at the September meeting.
The US producer price index for August will be presented today at 12:30 GMT. Economists expect producer prices to rise by 0.1% m/m, as in July, but in annual terms, the growth rate accelerated to 2.5% per annum from 2.4% per annum. Also at 12:30 GMT, the initial jobless claims report for last week will be released, while consensus estimates suggest a slight increase - to 230 thousand from 227 thousand a week earlier.
Yesterday's data showed that consumer inflation rose slightly in August, but the core CPI showed some resilience, which may prevent the Fed from cutting the interest rate by 0.5% next week. According to the CME FedWatch Tool, markets see a 13% probability of a 0.5% rate cut in September (down from 40% the week before), and a 87% probability of a 0.25% rate cut (up from 60% the week before). Experts also believe that Fed policymakers will begin the monetary easing cycle with a 0.25% rate cut, as they seek to reduce the likelihood of a recession, despite the fact that sustained price pressure deters them from more aggressive actions.