Gold prices slipped on Wednesday as investors booked profits ahead of key US inflation data that could influence the pace of Federal Reserve interest rate hikes.
Spot gold was down 0.1 % to $1 792.33/oz by 08:53 GMT, after hitting its highest since July 5 at $1 800.29 on Tuesday. US gold futures fell 0.2 % to $1 808.50.
"There is some profit taking emerging in the market ahead of the CPI data. If numbers confirm that inflation is set to ease that could reduce the potential for peak U.S. interest rates" and support gold eventually, said Saxo Bank analyst Ole Hansen.
Economists polled by Reuters expect U.S. annual inflation to have eased to 8.7% last month from 9.1% in June. Core inflation is expected at 0.5% month on month
Although gold can be seen as a hedge against inflation, higher U.S. interest rates dull the appeal of non-yielding bullion.
"Clearly the focus is on U.S. inflation data. Also, what's really important is ... where prices are currently trading, with $1,800 being the very important level," said Ilya Spivak, a currency strategist at DailyFX.
"If the inflation numbers come in stronger than expected, following last week's solid jobs report, we could see some rate cut expectations for next year coming down, which would be gold negative."
The Fed has hiked interest rates by 225 basis points (bps)since March as officials try to quash high inflation.
The gold market is close to pricing in a 75 bps rate hike in the September meeting, so any changes from that would impact gold, Hansen added.
Spot silver was down 0.4% to $20.42 per ounce and platinum fell 0.5% to $929.34.
Palladium edged 0.3% lower to $2 209.54.