Gold Prices Plunge as Energy Costs and Yields Outweigh Softer Inflation

Gold prices fell on Wednesday as rising energy costs and bond yields outweighed support from softer U.S. inflation data, putting the precious metal on course for a sizable September decline.

Spot gold XAUUSD was down about 0.7% near $4,153 an ounce in afternoon trading after briefly advancing following the inflation report.

The Commerce Department reported that the Personal Consumption Expenditures Price Index rose 0.3% in August, with core PCE inflation remaining at 3.0% from a year earlier.

Higher interest rates and Treasury yields tend to make non-yielding assets such as gold less attractive, and traders reduced expectations for another Federal Reserve rate increase at its October meeting.