Gold Prices Experience Slight Decline Ahead of U.S. Consumer Price Report

Gold prices saw a slight decline on Wednesday as traders eagerly anticipated the release of a report on U.S. consumer prices for the month of August. This report is expected to reveal an increase in inflation in the world’s largest economy.

Price Action

• Gold futures for December delivery (GCZ23) experienced a decrease of 60 cents, or less than 0.1%, and settled at $1,924 per ounce.
• Silver futures for December delivery witnessed a drop of 21 cents, or 0.9%, reaching $23.19 per ounce.
• Platinum for October delivery (PLV23) fell by $8.80, equivalent to 1%, settling at $904 per ounce, while palladium for December delivery (PAZ23) experienced a decrease of $4.30, or 0.3%, reaching $1,241 per ounce.
• Copper for December delivery (HGZ23) saw a decrease of 0.1% and settled at $3.79 per pound.

Market Drivers

The anticipation of high inflation numbers for August has led to an increase in the U.S. dollar and Treasury yields. This double impact has consequently put pressure on gold prices. Higher yields provide investors with greater returns from holding bonds, causing gold, which does not offer any yield, to be less appealing.

Economists surveyed by the Wall Street Journal anticipate a year-over-year rise of 3.6% in consumer prices for August, compared to a 3.2% increase in July. If the data confirms or surpasses these expectations, it could further weigh on gold prices, according to analysts.

According to Marc Chandler, chief market strategist at Bannockburn Global Forex, "A stronger dollar and firmer rates have weighed on gold." He shared this observation in a note to clients on Tuesday.