August PPI rose 0.4% month-over-month, with annual producer inflation accelerating to 5.4% — above the 5.3% forecast. The hotter-than-expected print reignited fears the Fed isn't done tightening, pressuring non-yielding gold.
Traders now price in a more than 70% probability of a Federal Reserve rate hike at the September 16 meeting. Rising rate expectations lift the US dollar and real yields, a direct headwind for gold.
WTI crude surged past $100 amid escalating US–Iran strikes in the Middle East, pushing the US 10-year yield toward 4.93%. Higher energy costs feed inflation fears, while the ECB also warned inflation risks remain tilted to the upside.