Gold Falls as CPI Data Dampens Talk of Oversized US Rate Cut
Gold prices fell on Wednesday as the dollar and Treasury yields firmed after U.S. inflation data prompted investors to scale back expectations of an oversized rate cut from the Federal Reserve next week.
Spot gold was down 0.1% at $2,513.19 per ounce at 1:46 p.m. ET (1746 GMT). U.S. gold futures settled mostly unchanged at $2,542.40.
U.S. consumer prices rose only slightly in August, but underlying inflation showed some stickiness, which could dissuade the Fed from delivering a half-point interest rate cut next week.
Markets are currently pricing in an 87% chance of a 25-basis-point U.S. rate cut, compared to 71% before the data, the CME FedWatch tool showed.
The Fed will lower interest rates by 25 basis points at each of the three remaining policy meetings in 2024, according to a majority of economists in a Reuters poll that found only nine out of 101 expected a half-percentage-point cut next week.
Among other metals, spot silver was up 0.8% at $28.60 per ounce, platinum rose 1.9% to $955.73 and palladium firmed 4.8% to $1,011.09.
Source : Reuters
