Spot gold was little changed on Wednesday after rising to its highest level since mid-May in the previous session, as investors waited for a closely watched US inflation report due later in the day.

The metal’s ability to hold its recent gains without giving much back suggests the market is comfortable with its current positioning ahead of the data, rather than unwinding exposure into the event. That matters because gold is often driven by shifts in interest-rate expectations, real yields and broader confidence in financial markets, so a period of stability before a major data release can signal that traders are waiting for new information rather than resetting the trend.

Tuesday’s advance extended a sharp rally that began last week after the US Treasury announced an expanded bond buyback programme. The move was designed to calm a bond market selloff that had pushed long-dated yields to multi-decade highs. That development has kept concerns about US fiscal sustainability in the background of gold’s recent strength, alongside shifting expectations for interest rates.

The focus today is the July Personal Consumption Expenditures price index, the Federal Reserve’s preferred inflation gauge, due at 12:30pm GMT. Markets are treating the release as a key input ahead of Fed Chair Kevin Warsh’s keynote address at the Jackson Hole symposium on Friday, which is being watched closely for signals on the central bank’s next move.

Analysts say the most supportive outcome for gold would be a softer-than-expected inflation reading paired with a dovish or balanced tone from Warsh. Such a combination would reinforce expectations for lower real yields and reduce the opportunity cost of holding a non-yielding asset such as gold.

Renewed concern about US fiscal sustainability, particularly around the Treasury’s buyback plans, is also seen as a potential source of support for gold independent of the near-term rate path.

Earlier this month, an unexpected decline in nonfarm payrolls, alongside a consumer inflation reading that broadly matched forecasts, had already tempered expectations for near-term tightening. Traders are currently pricing in roughly a two-in-three chance that the Fed will leave interest rates unchanged at its next meeting, according to the CME FedWatch Tool.

Geopolitical developments have also been in view. Iran said it has resumed talks with Oman over managing the Strait of Hormuz, a move that sent oil prices lower. The development offered tentative signs of de-escalation in a conflict that has otherwise remained a source of market uncertainty.

Lower energy prices could complicate the inflation outlook priced by gold traders, since easing oil costs typically reduce headline price pressures. For now, however, gold’s immediate direction remains tied to today’s inflation data and Friday’s central bank commentary.