Gold futures titled lower in European trade for the first session in four days, as the dollar index backed off July 28 highs amid a lack of data from the euro zone and ahead of US data later today.

As of 09:28 GMT, gold futures due in December fell 0.16% to $1,805 an ounce, while the dollar index fell 0.20% to 105.01. 

Earlier US data showed consumer prices rose less than expected, paving the way for a 50 basis points Fed rate hike at the next meeting, instead of 75 basis points. 

Recent data showed US consumers expect one-year inflation at 6.2%, down from 6.8%, while three-year inflation to be down to 3.2% from 3.6%, as gasoline prices decline.

From the US, producer prices are expected up 0.2% in July, while core prices are expected up 0.5% m/m. 

US unemployment claims are expected up 4 thousand to 264 thousand last week, while continuing claims fell 9 thousand to 1.407 million.

Fed Chicago President Charles Evans said the labor sector is very lively and strong and lauded employment numbers, and expressed strong optimism for the US economy's growth in the second half of the year. 

Evans expects growth between 1.2% and 2% next year, with the Fed supposed to hike rates six month before that, expecting final interest rates by 3.5% by year's end, and could reach 4% later. 

Other Fed members expressed confidence in the economy as inflation numbers continue to taper off and moderate, however the Fed remains on a path to tighten monetary policies and hiked rates to maintain a lid on prices. 

Euro rose in European trade near two-month highs against dollar amid a lack of data from Europe and ahead of some important US data today.

As of 08:59 GMT, EUR/USD rose 0.41% to 1.0340, with a session-high at 1.0341, after rising 0.84% yesterday, testing July 5 highs.

Earlier US data showed consumer prices rose less than expected, paving the way for a 50 basis points Fed rate hike at the next meeting, instead of 75 basis points. 

Recent data showed US consumers expect one-year inflation at 6.2%, down from 6.8%, while three-year inflation to be down to 3.2% from 3.6%, as gasoline prices decline.

Five-year inflation forecasts fell as well to 2.3% from 2.8%, and we'll get a better idea about current inflation rates in the US today.

A reversal in yields curves between two-year and five-year US treasury yields paves the way for serious depression in the US later this year. 

From the US, producer prices are expected up 0.2% in July, while core prices are expected up 0.5% m/m. 

US unemployment claims are expected up 4 thousand to 264 thousand last week, while continuing claims fell 9 thousand to 1.407 million.

US stock indices rose on Wednesday after the release of US inflation data. 

US consumer prices rose 8.5% y/y in July, less than 8.7% expected, and down from 9.1% in June. 

Core prices rose 5.9% y/y last month, and 0.3% m/m, while analysts expected a 0.2% rise. 

Gasoline prices rose 7.7% y/y, the highest since April 2020, after rising 11.2% in June, while food costs rose 10.9%.

Dow Jones rose 1.5% as of 14:31 GMT to 33,254, while S&P 500 rose 1.6% to 4,186, as NASDAQ climbed 2% to 12,740.

Gold futures tilted lower in European trace off late June highs, while the dollar index backed off July 28 highs, ahead of crucial US inflation data later today. 

As of 09:45 GMT, gold futures due in December fell 0.08% to $1,810 an ounce, while the dollar index slipped 0.20% to 106.13. 

From the US, consumer prices are expected up 8.7% last month, slowing down from 9.1% in the previous month.

US wholesale inventories are expected up 1.9% in June, while consumer credit is expected down to $172.5 billion.

Recent data showed US consumers expect one-year inflation at 6.2%, down from 6.8%, while three-year inflation to be down to 3.2% from 3.6%, as gasoline prices decline. 

Five-year inflation forecasts fell as well to 2.3% from 2.8%, and we'll get a better idea about current inflation rates in the US today. 

Several Fed officials expressed interest in hiking interest rates by yet another 75 basis points at the next few meetings to contain inflation.

Earlier Chinese data showed consumer prices rose 2.7% last month, up from 2.5% in June, while producer prices rose 4.2%.

From the US, consumer prices are expected up 8.7% last month, slowing down from 9.1% in the previous month.

China announced new military maneavours around Taiwan amid ongoing talks between US and Chinese military to discuss the Taiwan situation.

China also announced plans to stop cooperation with US on crime combat, triggering further tensions between both sides.