A lower-than-expected PCE reading may contribute to a much anticipated rate cut. However, a stronger inflation reading could force the Fed to delay policy easing. The markets are pricing in a 74.3% probability of a September rate cut.

XAUUSD on a 4-hour chart has coiled into a pennant and is primed for a breakout.

Producer inflation fell 0.2% vs. 0.1% expected, fueling hopes that a rate cut may finally be on the horizon.

Gold fell by over 1% within minutes of news that the PBOC halted its gold purchases for the first time since October 2022! And there could be more volatility for the precious metal when the US jobs report arrives in just a couple of hours.