Gold drops over 1% after in-line US inflation data
GLD•Other precious metals
On the geopolitical front, Iran and Oman are still working on the details of an agreement on the Strait of Hormuz, a senior Iranian source said on Wednesday, after Iran's Revolutionary Guards said the two countries had agreed how to share the waterway and its revenue.
Among other metals, spot silver XAG= fell 1% to $67.93 per ounce, platinum XPT= dropped 1.4% to $1,831.67, and palladium XPD= was down 0.1% at $1,324.63.
Traders eye Fed policy after PCE data
"Gold's price action up to today's data was just some profit taking ... PCE data came in largely in line with expectations, so we're consolidating within yesterday's range at this point," said Peter Grant, vice president and senior metals strategist at Zaner Metals.
The Personal Consumption Expenditures Price Index, which the Fed uses to set its inflation target, increased 3.7% in the 12 months through July, the Commerce Department's Bureau of Economic Analysis said on Wednesday. Economists polled by Reuters had forecast a reading of 3.6%.
Traders now see a 40% chance of a rate hike next month, compared with 36% before the data, and are pricing in a 60% chance that the Fed will leave rates unchanged, according to the CME FedWatch Tool. FEDWATCH/
Non-yielding gold often loses its appeal in a high-interest-rate environment.
Gold extends losses after inflation data
US gold prices extended losses on Wednesday after U.S. inflation data came largely in line with expectations, increasing bets on a Federal Reserve interest-rate hike next month, while investors also awaited remarks from Chairman Kevin Warsh this week.
Spot gold XAU= fell 1.3% to $4,595.93 per ounce by 1:57 p.m. EDT (1757 GMT), after prices had climbed to their highest since May 14 on Tuesday. U.S. gold futures GCcv1 settled 0.9% lower at $4,653.30.
