Gold rose in early Asian trade as expectations of a Federal Reserve rate hike were pared back following the latest U.S. inflation data, which showed July consumer prices rising only marginally from June. Analysts at ANZ Research noted that the modest increase suggests the Fed may stay on hold, tempering the outlook for tighter monetary policy. The early rally was driven by safe‑haven demand and a weaker dollar, reinforcing gold's appeal despite the modest price move.

The data imply the Fed is likely to keep rates unchanged at its upcoming meeting, leaving the market pricing only a 40% chance of a rate hike. “This continues the steady stream of data that have tempered expectations of monetary tightening and should provide further support for gold in the coming months,” the analysts added. With the 40% pricing probability, investors are balancing the risk of future tightening against the current supportive backdrop, keeping gold's demand resilient.

Although higher interest rates typically weigh on non‑interest‑yielding assets such as gold, the current environment is supportive, with spot gold up 0.5% to $4,433.11 an ounce, indicating modest but positive momentum. The price level also reflects ongoing concerns about inflation persistence and geopolitical uncertainty, which may sustain buying interest.