(Bloomberg) — Gold slipped as traders trimmed bets on the Federal Reserve cutting interest rates next month, following a pick-up in inflation.
US wholesale inflation accelerated in July by the most in three years, suggesting companies are passing along higher import costs related to tariffs.
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Bond yields and the dollar advanced after the data print, sending bullion as much as 0.8% lower. Swap traders now are pricing in about an 85% chance the US central bank will reduce rates in September after fully pricing in the move a day earlier.
Bullion typically benefits in a lower-rate environment as it pays no interest.
Gold has climbed 27% this year, with the bulk of those gains occurring in the first four months. It has been supported by heightened geopolitical and trade tensions that have spurred haven demand, while central bank purchases have also underpinned its strength.
Spot gold was 0.5% lower at $3,338.34 an ounce at 2 p.m. in New York. The Bloomberg Dollar Spot Index rose 0.4%. Silver fell, while palladium and platinum gained.
Last week, confusion over whether gold bars would be subject to US tariffs prompted a spike in the premium for gold futures in New York over the spot price in London. President Donald Trump said on Monday that there would not be a levy — causing the two markets to converge — but formal clarification is still forthcoming.
Copper traded on the London Metal Exchange slipped 0.4% to settle at $9,766 a ton at 5:50 p.m. local time. Other main LME metals were mixed, with zinc up 0.7% while nickel fell 1.5%. Copper traded on the Comex fell 0.3% to settle at $4.5435 a pound.
–With assistance from Jack Ryan and Sybilla Gross.
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