Gold Prices Fall After US Inflation Report

Gold prices fell Wednesday, pulling back from a three-month high after hotter-than-expected U.S. inflation data. Comex gold for December delivery dropped 1% to $4,649.10 an ounce in New York. This contract had reached an overnight high of $4,730.90.

Spot gold traded 1.4% lower at $4,592.53, moving off its Tuesday peak. Despite the daily dip, spot gold remains up about 14% in August. Comex silver for September delivery slipped 1.1% to $67.96 an ounce.

The retreat followed a warm U.S. inflation gauge. Headline Personal Consumption Expenditures (PCE) rose 3.7% from a year earlier in July, slightly above forecasts. Traders are now watching Federal Reserve Chairman Kevin Warsh’s upcoming speech for signals on interest rates.

Gold’s recent three-week surge was powered by U.S. Treasury intervention in the bond market. This revived buying of hard assets as a hedge against deficits and a weaker dollar. Bullion-backed exchange-traded funds added over 28 tonnes last week, the most since January.

Gold and silver mining stocks also eased Wednesday. Agnico Eagle dropped 3.7%, AngloGold fell 4.3%, and Wheaton Precious Metals lost 4.8%. August has been a strong month for the group, with Eldorado Gold gaining 55% and Newmont rising 41% since July’s end.