US Inflation Data Keeps Gold Prices Steady Amid Interest Rate Hike Bets

Gold prices were steady on Wednesday as investors focused on US inflation data, which came in largely in line with expectations. The Personal Consumption Expenditures Price Index increased 3.7% in the 12 months through July, matching economists' forecasts.

Despite this, gold futures dropped 0.6% to $4,667.10 per ounce, while spot gold fell 1% to $4,611.79. The dollar rose 0.2%, making greenback-priced bullion more expensive for holders of other currencies.

Peter Grant, vice president and senior metals strategist at Zaner Metals, said 'Gold's price action up to today's data was just some profit taking ... PCE data came in largely in line with expectations, so we're consolidating within yesterday's range at this point.'

Traders now see a 40% chance of an interest rate hike next month, compared to 36% before the data. Non-yielding gold often loses its appeal in a high-interest-rate environment.