Gold Drops for Third Session Ahead of US Inflation Data

Spot gold fell 0.4% to $4,140.33 per ounce by 11:21 GMT, marking its third consecutive session of decline, while US December futures dropped 0.3% to $4,162.80 ahead of the inflation data release, according to a report published by Kitco citing Reuters.

Fawad Razaqzada, market analyst at Forex.com, said traders mostly remained neutral ahead of the data release, pointing to a potential recovery toward the $4,500 to $4,700 range later in the year. The CME FedWatch tool showed pricing for a rate hike probability at around 22% in October and 90% in December, while New York Federal Reserve President John Williams said an additional hike might be warranted.

Among other metals, silver fell 1.5% to $58.57 per ounce, platinum dropped 0.6% to $1,653.18, while palladium rose 0.6% to $1,132.70.

Gold remains under pressure from rising US Treasury yields and a strong dollar, as this increases the cost of holding the non-yielding metal, at a time when traders await US consumer price data to determine the course of monetary policy in the coming months, which matters to Arab investors who view gold as a savings vehicle.

What Do These Terms Mean?

Spot Gold: The price paid for immediate delivery of gold in global metals markets, serving as the primary benchmark for pricing the metal.

Futures Contracts: An agreement to buy or sell a quantity of a commodity at a predetermined price with later delivery, where gold is used for hedging or speculation.

CME FedWatch Tool: A tool by the Chicago Mercantile Exchange displaying traders' expectations for US interest rate change probabilities at each meeting.

Interest Rate Hike: A central bank increase in the benchmark interest rate, raising borrowing costs and typically putting pressure on gold prices.