Gold fell more than 1% on Thursday after a firm US PPI print and rising oil
prices boosted bets on a Fed rate hike next week. Capital.com senior analyst
Kyle Rodda said August PPI signaled a pickup in underlying inflation partly
driven by higher energy costs; headline PPI was broadly in line with forecasts
but energy rebounded. CME FedWatch now prices a roughly 70% chance of a hike
next week, up from 62% before the data. A Reuters survey of economists still
shows most expect the Fed to hold rates at the Sept. 15-16 meeting and for the
rest of the year. A stronger dollar and a rise in the 10-year US Treasury yield
further pressured dollar-priced gold. Rodda added that higher bond yields
reflect more persistent inflation pressure from oil, increasing the opportunity
cost of holding non-yielding assets and weighing on gold.
