Gold prices declined on Wednesday as the U.S. dollar advanced and markets continued to assess the outlook for inflation and Federal Reserve monetary policy.
Spot gold fell 0.9% to $4,318.05 an ounce by 04:53 ET, while gold futures were down 0.5% at $4,354.90 an ounce.
The U.S. Dollar Index gained 0.1% to 100.71, touching its highest level since July 30. A rise in the dollar can increase the cost of gold for buyers holding other currencies.
The moves came as investors considered the possibility that U.S. interest rates could remain elevated as policymakers respond to inflation pressures.
Federal Reserve Outlook Remains in Focus
The Federal Reserve raised its policy rate by 25 basis points last week, bringing the target range to 3.75%-4.00%.
Some Fed officials have subsequently indicated that additional tightening could be required if inflation pressures persist.
Expectations surrounding monetary policy have also supported the dollar.
David Morrison, Senior Market Analyst at Trade Nation, said investors had increasingly turned to the U.S. currency during periods of uncertainty.
“The greenback has become the ‘go to’ haven for investors in times of uncertainty,” Morrison said.
Higher interest rates can affect demand for gold because the precious metal does not provide an interest yield.
Energy Costs Remain an Inflation Factor
Oil prices were below $100 a barrel on Wednesday as markets assessed improving Gulf supplies and diplomatic developments involving the U.S. and Iran.
Crude prices nevertheless remain more than 60% above their levels at the beginning of the year.
Energy prices remain one component of the inflation outlook being monitored by investors as they assess the potential direction of U.S. interest rates.
Chinese Gold Imports Reach 1,000 Tonnes
ANZ analysts said gold has been trading in a relatively narrow range as expectations for further interest-rate increases are weighed against investment demand.
The bank pointed to Chinese demand as one factor supporting the market.
China imported 1,000 tonnes of gold during the first eight months of 2026, according to ANZ.
Chinese gold ETFs added around 44 tonnes in August, while the People’s Bank of China increased its purchases to approximately 20 tonnes during the month.
The figures showed continued purchases from Chinese investors and the country’s central bank during August.
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