Gold prices set for monthly decline as investors await US inflation data

Gold prices fell on Wednesday and are on track for a monthly loss, pressured by expectations of interest rate hikes as investors await US inflation data for clues on the Federal Reserve's next policy move.

Spot gold slipped 0.2 percent to $1,770.63 per ounce, down more than six percent since the start of the month. US gold futures, however, rose 0.5 percent to $1,201.90.

According to Reuters, Tony Sieg, CEO of Critical Metals, said the release of the Personal Consumption Expenditures (PCE) price index will be a key test for gold, as it could influence US monetary policy expectations and the direction of Treasury yields and the dollar.

CME's FedWatch tool shows traders see a 47 percent chance the Federal Reserve will raise interest rates in October, and a 91 percent chance of a hike in December.

Among other precious metals, spot silver dropped 0.8 percent to $60.98, platinum was steady at $1,705.10, and palladium fell 0.3 percent to $1,219.60. All three metals are also set for monthly declines.