Gold Futures Snap 5-day Winning Streak
(RTTNews) - Gold futures snapped a five-session winning streak and settled notably lower on Wednesday.
Investors assessed the likely move of the Federal Reserve in the wake of the latest data on producer price and consumer price inflation.
The dollar's recovery from a mid morning setback weighed on the yellow metal. The dollar index, which dropped to 102.27, recovered to 102.48, down just marginally from the previous close.
Gold futures for August ended down $27.30 or about 1.11% at $2,439.40 an ounce.
Silver futures for August ended lower by $0.441 or about 1.6% at $27.254 an ounce, while Copper futures advanced to $4.0520 per pound, gaining $0.0160.
The Labor Department said its consumer price index rose by 0.2% in July after edging down by 0.1% in June. The modest increase by consumer prices matched expectations.
Core consumer prices, which exclude food and energy prices, also crept up by 0.2% in July after inching up by 0.1% in June. The uptick by core consumer prices was also in line with economist estimates.
Meanwhile, the report said the annual rate of consumer price growth slowed slightly to 2.9% in July from 3% in June. Economists had expected the pace of growth to remain unchanged.
The annual rate of core consumer price growth also slipped to 3.2% in July from 3.3% in June, in line with expectations.
While the slowdowns by the annual rates of price growth suggest the Federal Reserve is likely to lower interest rates next month, traders may feel the chances of a rate cut are already priced into the markets after yesterday's rally.
CME Group's FedWatch Tool is currently indicating a 56.5% chance the Fed will lower rates by a quarter point and a 43.5% chance of a half point rate cut.
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