Gold prices fell for a third day as traders awaited US inflation data, which could provide an indication of the Federal Reserve's next interest rate decision.
The price of the precious metal fell below $4,150 an ounce, while oil prices stabilized as investors weighed renewed attacks in the Middle East against the recovery in production from major producers like Saudi Arabia. Further disruptions to energy supplies could accelerate inflation and strengthen the case for higher borrowing costs, putting downward pressure on gold, which does not offer a yield.
US inflation data and interest rate forecasts
The U.S. consumer price index data, due to be released later on Wednesday, will provide the Federal Reserve with more information on inflation, after it raised interest rates last month for the first time since 2023.
Swap traders are pricing in a low probability of an interest rate hike at this month's monetary policy meeting, but see an approximately 85% chance of an increase in December.
New York Federal Reserve President John Williams said on Tuesday that he believes raising interest rates again this year would be appropriate.
Daniel Ghali, head of metals research at Deutsche Bank, wrote in a note that recent gold price movements remain limited despite widespread selling by market-following funds.
He added that there is strong actual demand for gold, as commercial and non-commercial flows combine to offset the impact of sales through trading algorithms, while individual investors are simply waiting.
Spot gold fell 0.4% to $4,144.91 an ounce at 9:38 a.m. London time, while silver dropped 0.9% to $58.63.
While platinum declined slightly, palladium rose, and the Bloomberg Dollar Spot Index, which measures the performance of the US currency, was steady.
