Gold Nears Record High on Softer US Inflation Signals and Rising Geopolitical Tensions

Gold climbed to a near-record $3,650 per ounce on Wednesday after an unexpected decline in US producer prices reinforced expectations that the Federal Reserve will resume rate cuts at next week’s meeting.

Both headline and core PPI fell 0.1% in August, defying forecasts for a 0.3% rise, driven by a sharp drop in machinery and vehicle wholesaling margins.

The data followed weak labor market reports earlier this month that have led markets to price in multiple Fed cuts this year.

Investors now await Thursday’s consumer price inflation report for further guidance.

Geopolitical risks also underpinned demand for safe-haven assets, as US President Donald Trump urged the EU to impose tariffs of up to 100% on China and India to pressure Russia over the war in Ukraine, unrest in the Middle East escalated, and Poland said it shot down Russian drones that violated its airspace during a major attack in western Ukraine.