Gold Tumbles as Cooling Inflation Report Triggers Rate Expectations Drop

The spot gold price dropped by 1.31% to $4,349.80 an ounce in late-afternoon U.S. trading on Thursday as a cooler wholesale inflation report reduced Treasury yields and rate-hike expectations.

This development also led to lower demand for metals as near-term inflation hedges.

North American equity markets closed higher, with the S&P 500 rising 0.7% to a record 7,798.99.

The latest positioning shifted further toward a September Fed hold after this morning's PPI and jobless-claims data, which saw initial jobless claims rise 9,000 to 209,000.

September hike odds fell to 34.6% from 40.6% after the PPI release, and the 10-year Treasury yield fell to 4.648% from 4.686% Wednesday.