Gold prices fell slightly in Asian trading on Friday but remained close to record highs as markets awaited additional cues on interest rates from key U.S. inflation data set to be released later in the day.

• Gold prices are poised to achieve strong gains in August, driven by a combination of haven demand and expectations of interest rate cuts, pushing the yellow metal to record levels.

• Spot gold fell by 0.3% to $2,514.55 per ounce, while gold futures set to expire in December dropped by 0.5% to $2,547.80 per ounce.

• Spot prices are on track to gain around 2.8% in August after hitting a record high of $2,531.72 per ounce earlier in the month.

• Tensions in the Middle East have spurred demand for safe havens, particularly gold, alongside a downturn in risk-driven markets at the beginning of the month. Signs of continued central bank buying in emerging markets also supported prices.

• However, the biggest support point for gold has been expectations of lower U.S. interest rates, creating a more favorable environment for investing in the yellow metal.

• Data for the Personal Consumption Expenditures (PCE) Price Index—the Federal Reserve's preferred inflation gauge—is set to be released later on Friday and is expected to provide further indications regarding interest rates.

• The PCE Price Index data is anticipated to show that inflation remained elevated in July, which could give the Federal Reserve less incentive to sharply cut interest rates, especially with recent signs of resilience in the U.S. economy. The dollar has strengthened in this scenario and is heading for a weekly gain.

• Traders still expect at least a 25 basis point rate cut in September, according to the CME FedWatch Tool.

• Meanwhile, both platinum and silver have lagged significantly behind gold throughout August.

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