Gold Prices Sink 6.5% in September as Inflation Data Dents Rate Hike Odds

Gold prices have slipped into a monthly decline, pressured by a stronger dollar and rising oil costs. The precious metal is now down 6.5% for September, with gold dipping 0.6% to settle at $4,158.70/oz.

The U.S. inflation data released on Wednesday showed the headline personal consumption expenditures (PCE) price index ticking up 0.3% M/M and 3.4% Y/Y in August. This was lower than estimated figures of 0.4% and 3.7%. On a core basis, the PCE price index increased 0.2% M/M and 3% Y/Y in August, below consensus numbers of 0.3% and 3.3%.

The data deluge comes at a time when U.S. Treasury yields have surged to multi-decade highs, sharply increasing borrowing costs. The October rate hike odds took a hit on Wednesday, with the probability of a quarter-point hike now standing at about 37% from nearly 51% the previous day.