Gold Prices Hold Steady Ahead of U.S. Inflation Data

Gold prices firmed for a third consecutive session on Thursday, with investors awaiting U.S. inflation data due later in the day for more insights on the Federal Reserve's interest rate path.

As of 0200 GMT, spot gold was up 0.2% at $2,375.70 per ounce. U.S. gold futures also showed a modest increase, rising 0.1% to $2,381.30.

The dollar's weakness contributed to gold's appeal, making greenback-priced bullion more attractive for holders of other currencies.

Investors are keenly awaiting the June Consumer Price Index (CPI) report, due at 1230 GMT, and the Producer Price Index (PPI) report on Friday. These reports are expected to provide further insight into the Federal Reserve's potential actions regarding interest rates. A lower-than-expected CPI report could further weaken the dollar and potentially push gold prices up to the $2,400 level, according to Marex analyst Edward Meir.

Fed Governor Lisa Cook indicated that U.S. inflation should continue to decline without a significant rise in the unemployment rate. Her comments came as the Federal Reserve continues to assess the economic landscape and the potential need for rate adjustments."I think gold is in a new paradigm, in a higher trading range and we're not going to see the old lows anymore. Another record high is possible this year if we get a geopolitical shock," Meir said. Gold is often seen as a hedge against geopolitical turmoil, and its appeal tends to rise when interest rates are low.

Fed Chair Jerome Powell emphasized on Wednesday that the U.S. central bank would make interest rate decisions "when and as" needed. On Tuesday, he mentioned to House members that "more good data" would strengthen the case for a rate cut.

Traders are currently pricing in a 46% probability that the Fed will have cut rates by two notches by the end of December's meeting and a 73% probability for the first cut in September, according to CME Group's FedWatch tool.

In other metals, spot silver edged 0.4% higher to $30.94 per ounce, platinum ticked up 0.2% to $991.80, and palladium gained 0.6% to $992.30.

Investors will be closely monitoring the upcoming data and Fed signals for further cues on the market direction.