Stronger U.S. inflation data boosts Treasury yields, weighing on gold as Fed rate hike odds for September rise.
Gold futures slipped Wednesday, retreating from three-month highs after the Personal Consumption Expenditures price index exceeded expectations. The core PCE, the Federal Reserve’s preferred inflation gauge, rose 0.2% month-over-month, slightly above forecasts.
The print reinforced bets for a potential September rate hike, lifting Treasury yields and pressuring non-yielding assets like gold. Markets had priced in a roughly 20% chance of a Fed move before the data, with odds now climbing.
Spot gold traded down 0.4% at $2,350 per ounce, paring earlier gains as the dollar strengthened against major peers.