Gold prices inched lower on Thursday after surging to a two-month high earlier on signs of cooling U.S. inflation and increased bets the Federal Reserve would leave its policy rate unchanged at its September meeting. Spot gold fell 0.6 percent to $4,384.03 an ounce after hitting a peak of $4,449.71 earlier, while U.S. gold futures were down 0.6 percent at $4,441.51. The U.S. dollar held steady after annual rates for both U.S. headline and core inflation eased slightly from June, easing pressure on the Federal Reserve to raise interest rates. Overnight data showed consumer prices inched up 0.1 percent month-on-month and 3.4 percent annually in July, matching expectations, while core inflation rose 0.2 percent on a monthly basis and 2.5 percent year-on-year. Traders now await the U.S. producer price index later today and readings on retail sales and consumer sentiment on Friday for additional clues on the Fed's rate trajectory.
