Gold drops 1 percent amid rate hike bets

Reuters – Gold prices fell more than 1 percent on Thursday, as strong U.S. inflation data and rising oil prices bolstered bets that the Federal Reserve (the U.S. central bank) will raise interest rates next week.

Spot gold dropped 1.2 percent to $4,349.32 per ounce, while U.S. gold futures declined 1.6 percent to $4,391.30.

Kyle Rodda, chief financial markets analyst at Capital.com, said producer price index data suggest a slight acceleration in core inflation within the U.S. economy, driven in part by rising energy costs.

The U.S. producer price index rose in August in line with expectations, amid a rebound in energy product costs.