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Donald Trump has described the Inflation Reduction Act (IRA) as a "green scam" and vowed to repeal it after he returns to the White House in January.
Gold fell to the lowest in more than three weeks as UK inflation returned to double digits, intensifying pressure on the government and central bank to take additional measures.
Spot gold was down 1.1% to $1,634.23 per ounce by 11:20 a.m. ET, its lowest since September 27. US gold futures dropped 1.0% to $1,639.50 per ounce in New York.
[Click here for an interactive chart of gold prices]
Following a slight rebound earlier this week, the precious metal has now reversed course as data showed UK consumer prices in September matched a 40-year high and exceeded economists’ expectations. The figures add to pressure on policy makers to lift interest rates significantly, weakening the attraction of the non-interest yielding bullion.
Meanwhile, the US dollar has continued to strengthen, rising 0.6% on Wednesday, after a slew of economic data reinforced expectations of the Federal Reserve’s hawkish policy path. The central bank’s tightening stance has weighed on bullion this year by pushing up the greenback and bond yields, causing the metal to slide about 20% from a high reached in March.
Atlanta Fed President Raphael Bostic reiterated that the bank is focused on cooling inflation that is running at its hottest in four decades. Treasury yields traded near multi-year highs ahead of US housing figures for September and the Fed’s Beige Book due later Wednesday.
The US currency remains a headwind as the Federal Reserve pursues an aggressive monetary policy to battle inflation.
“The market continues to be quite worried about aggressive Federal Reserve monetary tightening,” Bart Melek, head of commodity strategy at TD Securities, said in a Reuters note.
“We’re gonna have a fairly steep run up in interest rates and probably not a very quick pivot, so the gold market is responding (to that).”
(With files from Bloomberg and Reuters)
Read more: Gold industry sees bullion rising 10% in year despite rates
