Gold Slips for Second Day as CPI Surprise Fails to Shake Fed Rate-Cut Bets

09:45 AM EDT, 09/11/2025 (MT Newswires) -- Gold futures fell for a second straight session early Thursday even as the dollar weakened, after a higher-than-expected rise in U.S. consumer prices failed to dent expectations for a Federal Reserve rate cut next week.

Gold for December delivery was last seen down $7.40 at $3,674.60 an ounce, easing from Tuesday's record high of $3,682.20.

The U.S. Bureau of Labor Statistics said August consumer prices index rose 0.4% from July, up from 0.2% in the prior month and above the 0.3% consensus. Core CPI, excluding food and energy, increased 0.3%, matching expectations.

The report followed Wednesday's data showing the Producer Price Index fell 0.1% in August, compared with forecasts for a 0.3% gain.

Despite the mixed readings, markets still largely expect the Fed to cut its policy rate at the close of its two-day meeting Wednesday. The CME FedWatch Tool puts the odds of a 25-basis-point cut at 89.1% and a 50-point move at 10.9%.

Rate-cut expectations have fueled gold's record run this year by lowering the carrying cost of the metal while risk appetites remain strong.

"Up about 40% year-to-date, it is clear that gold is on quite the upswing. Rate cut bets continue to lend support to gold (with varying data points underscoring the market pricing), and the metal has rallied alongside risk-on assets," said Christopher Louney, a commodities strategist at RBC Capital Markets.

The ICE Dollar Index was recently down 0.16 point at 97.62, while Treasury yields also fell, with the two-year note at 3.529% and the 10-year note at 4.032%, both down 2.1 basis points.

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