Gold prices fell on Wednesday, as traders assessed the Federal Reserve’s outlook for further monetary policy tightening following a September U.S. inflation report which was mostly hotter than expected. 

At 06:06 ET (10:06 GMT), spot gold had fallen 1.5% to $4,100.16 an ounce, while gold futures declined by 1.3% to $4,122.59 an ounce.

Headline and underlying U.S. consumer price growth accelerated by more than anticipated on an annualized basis in September, underlining the impact of an energy shock linked to the Iran war that could factor into Federal Reserve interest-rate decisions over the rest of the year.

The U.S. dollar popped higher on Wednesday after languishing below its recent 18-month peaks earlier in the day as hotter inflation triggered rate hike fears among investors. 

The U.S. Dollar Index, which tracks the greenback against a basket of six major peers, jumped 0.5% to trade at 102.43. The jump comes after Tuesday’s 0.4% decline after the index touched its highest valuation since April 2025 earlier in the week.

Headline U.S. consumer price growth accelerated to 3.7% in the twelve months to September, up from 3.4% in August and faster than expectations of 3.6%.

Month-on-month, the closely-watched inflation gauge rose 0.6%, compared to 0.4% previously and in line with forecasts.

Bitcoin edged lower on Wednesday, falling below the $83,000 level as traders reacted to hotter-than-expected U.S. inflation data. 

The world’s largest crypto fell 0.6% to $82,813.4 by 09:53 ET (13:53 GMT). 

Broader crypto prices clocked slightly bigger losses, extending their weak start to October as a mix of profit-taking and risk aversion weighed on the sector. 

Caution over rising oil prices also weighed on crypto markets, amid continued military tensions in the Middle East. 

Gold prices steadied on Thursday after falling to their lowest level since early August in the previous session, as renewed tensions around the Strait of Hormuz kept inflation risks elevated and reinforced expectations that the Federal Reserve could raise interest rates again this year. 

By 09:32 ET (13:32 GMT), spot gold had advanced by 0.5% to $4,129.25 an ounce, while gold futures had gained 0.3% to $4,153.25 an ounce.

Iran has stepped up attacks on tankers crossing the Strait of Hormuz, adding to concerns over the security of a key global energy route. The White House is also considering possible military strikes against Iranian targets ahead of the U.S. midterm elections in November, according to media reports.

While oil flows from the Middle East briefly recovered to pre-conflict levels last month, the risks around Hormuz and the nearby Bab el-Mandeb Strait have pushed shipping costs to record highs.