Gold Falls Ahead of US CPI
Gold Slips After Record High, Investors Eye U.S. Inflation Data
Gold prices eased slightly on Wednesday after hitting record levels earlier this week, as investors waited for key U.S. inflation figures that could influence Federal Reserve policy.
Spot gold was down 0.2% at $3,633.97 per ounce as of 0411 GMT, following Tuesday’s all-time high of $3,673.95. U.S. gold futures for December delivery fell 0.3% to $3,671.90.
“Gold seems to be consolidating recent gains as markets await the U.S. Consumer Price Index and what it might mean for Fed rate cut expectations,” said Ilya Spivak, head of global macro at Tastylive.
U.S. producer prices unexpectedly fell in August, driven by lower trade services margins and modest increases in goods costs, adding to uncertainty in the markets.
Investors are now focused on the U.S. CPI data, due at 1230 GMT. A Reuters poll forecasts a 0.3% monthly rise for August, following a 0.2% increase in July. On a year-on-year basis, CPI is expected to climb 2.9%, compared with 2.7% in July.
Recent weak nonfarm payroll numbers, along with revised estimates showing 911,000 fewer jobs added over the past year through March, have strengthened expectations of future monetary easing. Weekly jobless claims, also due at 1230 GMT, are expected to provide further insights into the U.S. labor market.
“The trend points higher, but a hot CPI report could strengthen the dollar and weigh on gold in the short term,” Spivak noted. “Any losses may be limited, as markets are unlikely to abandon expectations for a Fed rate cut even if the timing shifts slightly.”
The Federal Reserve is widely expected to cut interest rates by 25 basis points at its meeting next Wednesday, with a small chance of a 50-basis-point reduction, according to the CME FedWatch tool. Lower interest rates typically support non-yielding assets like gold.
In other news, the Trump administration on Wednesday appealed a federal judge’s decision that temporarily blocked the dismissal of Fed Governor Lisa Cook.
Elsewhere in precious metals, spot silver was down 0.1% at $41.10 per ounce, platinum fell 0.2% to $1,383.50, while palladium held steady at $1,173.45.
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