Gold slipped again on Wednesday, trading near $4,160 an ounce while investors waited for the US consumer price index for September.
Spot gold sits below all of its major moving averages, and analysts see $4,100 at risk. The dollar index neared an 18-month high this week, which makes gold costlier for buyers who hold other currencies.
The Bureau of Labor Statistics releases the report at 8:30 a.m. Eastern. Forecasters expect annual inflation between 3.6% and 3.7%, up from 3.4% in August, with core prices rising 0.2% on the month. Continuum Economics projects a 0.6% monthly jump in headline prices, driven largely by record September gasoline costs.
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October Fed rate hike becomes more likely if core inflation runs hot, which would weigh on gold. Futures price in about a 21% chance of an October hike and 88% for December, according to CME FedWatch data. A cooler report would likely trim those bets and could help gold recover.
Zaner Metals strategist Peter Grant said on October 7 that he expects a dip toward $4,000 before a rebound to about $4,400 by year-end.
Producer prices follow Thursday, along with remarks from Fed Chair Kevin Warsh.
