Gold Tumbles as Strong US Data and Inflation Spur Rate Hike Bets

Gold prices plummeted by over 1.37% on Wednesday as US economic data and inflation figures aligned with expectations.

The Federal Reserve's (Fed) preferred inflation gauge, the Core Personal Consumption Expenditures (PCE) Price Index for July, came in at 3.3% YoY, matching June's reading.

Headline inflation remained unchanged at 3.7% YoY for the second straight month, exceeding forecasts of 3.6%. This has increased the chances for a rate hike by the Fed towards the end of 2026, with Prime Terminal indicating a 77% probability for a December increase.

The US economy showed signs of steadiness, with the Gross Domestic Product in Q2 2026 meeting estimates and durable goods orders doubling June's print of 0.5%, coming in at 1.1% MoM and exceeding forecasts.