Gold Retreats from Over Two-Month High as Profit-Taking Emerges Near 100-Day Moving Average

Gold prices fell more than 1% on Thursday as investors locked in profits after the previous day's rally to a two-month high.

Spot gold declined 1.2% to $4,354.58 per ounce, having earlier touched $4,449.39, the highest since June 5.

December gold futures settled down 1.1% at $4,420.40 per ounce.

"$4,500 is a major resistance level for gold," said Bob Haberkorn, senior market strategist at StoneX. "We've tested this level twice, and each time prices pulled back sharply, making traders nervous as they approach $4,500."

U.S. Producer Price Index (PPI) data for July, released Thursday, showed no change, as falling goods prices offset rising service costs, suggesting inflationary pressures may persist.

The day before, U.S. Consumer Price Index (CPI) data showed a year-over-year increase of 3.4% in July, down from 3.5% in June and in line with economists' expectations.

According to CME's FedWatch tool, markets are now pricing in a 35% chance of a Fed rate hike at the September meeting, down from 40% immediately after the PPI release.

With inflation cooling for a second consecutive month, the urgency for Fed policymakers to raise rates next month appears to have diminished. However, Cleveland Fed President Beth Hammack reiterated on Wednesday that the Fed still needs to hike rates "now."

Lower interest rates reduce the opportunity cost of holding non-yielding gold, typically supporting gold prices.

"Gold rose 9% in a week, driven largely by Chinese and retail buying, but we're now seeing profit-taking near the 100-day moving average," said independent analyst Tai Wong.

Meanwhile, oil prices fell Thursday as investors weighed the outlook for weaker global demand this year while monitoring supply disruptions.

Additionally, U.S. Securities and Exchange Commission (SEC) filings show that the Bank of Korea held a U.S.-listed gold ETF as of the end of June, with a market value of approximately $250 million.

Other precious metals trading:

Spot silver slipped 1.2% to $64.51 per ounce.

Spot platinum dropped 2.4% to $1,715.54 per ounce.

Spot palladium fell 3.9% to $1,316.28 per ounce.