Investing.com - Gold prices fell for a third straight day on the back of signs that the Federal Reserve could be less aggressive in policy easing than markets expect.
Gold futures for August delivery on the Comex division of the New York Mercantile Exchange, fell $3.95, or 0.3%, to $1,407.25 a troy ounce by 9:04 AM ET (13:04 GMT).
Gold’s biggest decline this week occurred on Tuesday as a stronger-than-expected reading of U.S. retail sales suggested that the Fed may not hurry to ease cut interest rates.
Even though markets are currently pricing the odds of a quarter-point interest rate cut at 100% for the end of the month, San Francisco Fed President Mary Daly indicated late Tuesday that she still was still uncertain over whether it was the time to do so.
"At this point I'm not leaning one direction or another, but I am very much oriented toward looking at the data, watching the pieces come out, looking at the preponderance of evidence on mood and behavior and momentum and headwinds," she said in an interview with Reuters.
However, her colleague Charles Evans, chief of the Chicago Fed, argued that a half-point reduction could be warranted in order for the central bank to reach its inflation target.
“There is an argument that if I think it takes 50 basis points before the end of the year to get inflation up, then something right away would make that happen sooner,” he said.
Dallas Fed President Robert Kaplan, who had opposed a cut, did recently shift his stance, saying that he now thinks a "tactical" reduction of a quarter point could address the risks seen by bond investors, who have pushed some long-term yields below shorter-term ones.
A strong employment report released at the beginning of the month had appeared to rule out a 50 basis point cut at the July 30-31 meeting, but remarks last week by Fed Chair Jerome Powell have seen some hopes of quick and decisive action from the Fed return.
Fed funds futures now price in a 34.9% chance for a 50 basis point cut at the next meeting.
Gold is sensitive to lower interest rates that reduce the opportunity cost of holding non-yielding bullion.
In other metals trading, silver futures rose 0.3% at $15.732 a troy ounce by 9:05 AM ET (13:05 GMT).
Palladium futures advanced 1.5% to $1,539.10 an ounce, while sister metal platinum lost 0.7% to $840.95.
In base metals, copper traded down 0.3% to $2.692 a pound.
-- Reuters contributed to this report.