Gold Prices Slip as US Inflation Fuels Rate-Hike Bets
Gold prices edged lower after US inflation data showed hotter-than-expected growth in August. The core consumer price index, excluding food and energy costs, rose by 0.3% from the previous month.
The data increased speculation that the Federal Reserve will raise interest rates for the first time in three years when it meets this week. Traders are pricing in a roughly 88% chance of an increase in September.
Higher borrowing costs typically weigh on gold, which doesn't pay interest. However, by tightening monetary policy, the Fed may risk attracting criticism from President Donald Trump, who has repeatedly called for lower rates.
Oil prices surged again due to ongoing conflict in the Middle East, adding inflationary pressure. Brent crude rose towards $107 a barrel.