Gold prices inched up on Thursday after a 1% decline in the previous session following inflation data that dampened hopes for a larger September U.S. rate cut, while the focus shifted to retail sales data.

Spot gold rose 0.2% to \$2,452.83 per ounce, as of 0317 GMT, after prices fell their most since Aug. 6 on Wednesday.

U.S. gold futures were 0.4% up at \$2,490.20.

The prospects of less aggressive rate easing may have triggered some profit-taking in gold prices overnight, said IG market strategist Yeap Jun Rong.

“Prices are regaining some ground in the Asia session on some views that there may be some over-reaction in yesterday’s downside move,” Yeap added.

Data on Wednesday showed that the U.S. consumer price index rose moderately in July and the annual increase in inflation slowed to below 3% for the first time since early 2021.

The data opened the door wider for the U.S. Federal Reserve to cut rates next month but a larger reduction is unlikely.

Traders now see about a 36% chance of a 50-basis-point rate cut in September, down from 50% before the data release, according to the CME FedWatch Tool.

A low interest rate environment tends to boost non-yielding bullion’s appeal.

The market focus will be now on U.S. retail sales and initial jobless claims data, both due at 1230 GMT.

A break to a new record high may be on the table for gold, amid the Fed’s rate-easing cycle, healthy central bank demand and geopolitical and economic risks, Yeap added.

Hamas said on Wednesday it would not take part in a new round of Gaza ceasefire talks slated for Thursday in Qatar.

Spot silver gained 0.2% to \$27.65, platinum rose 0.9% to \$927.51 and palladium edged 0.1% higher to \$936.26

South Africa’s Northam Platinum on Wednesday warned of a sharp fall in profit, saying it expected an uncertain global economic outlook to keep platinum group metal prices low for “some time”.