Ammon News - Gold prices fell on Wednesday after ‌climbing more than 2% in the previous session, as rising oil prices fuelled inflation concerns and uncertainty over the U.S. interest-rate outlook, weighing on non-yielding bullion.

Spot gold was down 0.6% at $4,028.43 per ounce, ​as of 0443 GMT. U.S. gold futures for August delivery eased 0.8% to $4,035.50.

Gold ​jumped more than 2% to as much as $4,100.49 per ounce on Tuesday, ⁠rebounding from a two-week low, after data showed U.S. consumer inflation slowed more than expected ​in June as energy prices retreated.

Oil prices extended gains to a third consecutive session as ​U.S. President Donald Trump reimposed a naval blockade of all Iranian ports and threatened to hit power plants and bridges next week unless Tehran resumes negotiations, in the latest U.S. escalation of the conflict.

"I reckon ​that the market is now looking past the CPI data, which is kind of ​a lagging indication... Trump continues to maintain the blockade of ships that is flowing out of the ‌Strait ⁠of Hormuz, causing oil prices to rise and gold to come under pressure," said Kelvin Wong, a senior market analyst at OANDA.

Elevated crude oil prices can stoke concerns around inflation and higher-for-longer interest rates, and while gold is traditionally seen as an inflation hedge, it ​does lose its appeal ​as a non-yielding ⁠asset in a high-interest-rate environment.

Top Federal Reserve officials welcomed cool inflation figures for June, but said they would need more such readings to feel ​confident that price pressures are truly easing.

The Producer Price Index, due ​later in ⁠the day, is expected to offer further insight on inflation.

Traders now see about a 58% chance of a rate increase at the Fed's September meeting, versus 76% before the report, and ⁠are ​still pricing an about 80% chance of a December ​hike, CME FedWatch Tool's data showed.

Elsewhere, spot silver lost 0.5% to $58.35 per ounce. Platinum eased 0.1% to $1,629.89 and palladium ​fell 0.2% to $1,302.10.


Reuters