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Gold slips more than 1% after inflation data lifts Fed-hike odds
Spot gold dropped 1.2% to $4,354.6 per ounce after reaching a two-month high, while markets cut the September rate hike odds to 35%.
Gold prices retreated on Thursday, falling more than 1% as investors took profits after the metal climbed to its highest level in about two months on the back of recent U.S. inflation data. Reuters reported spot gold fell 1.2% to $4,354.58 per ounce by 12:58 a.m. EDT.
The latest U.S. Producer Price Index showed July prices were unchanged, as declines in goods prices offset higher services costs, suggesting inflation pressures may persist. The data followed a Wednesday consumer price report showing U.S. inflation rose 3.4% in the 12 months through July, down from 3.5% in June.
The cooling inflation helped temper expectations for a Federal Reserve rate hike next month. According to the CME FedWatch Tool, markets were pricing a 35% chance of a September hike, down from 40% immediately after the PPI data, and Reuters said Fed policymakers were unlikely to feel urgency after inflation cooled for a second consecutive month.
Analysts pointed to a technical resistance area near $4,500 as prices tested that level twice before turning lower. Reuters also noted other precious metals slipped, with spot silver down 1.2% to $64.51 per ounce, platinum down 2.4% to $1,715.54, and palladium down 3.9% to $1,316.28.
Latest closeGold $4,157.80 ▲0.4%|Silver $59.48 ▼0.7%|Platinum $1,647.50 ▼2.7%