Gold prices fell slightly in Asian trading on Wednesday but remained close to record highs as traders awaited the consumer inflation reading following a weak producer inflation report.

- The dollar approached eight-month lows after a soft inflation reading on Tuesday, which benefited most metal prices. However, further gains in the metal markets were limited by some caution ahead of Wednesday’s consumer price index reading.

- Spot gold fell by 0.2% to $2,461.11 an ounce, while gold futures expiring in December dropped by 0.3% to $2,500.40 an ounce.

- Gold futures hit record highs this week, while spot prices were near a record high of $2,483.78 an ounce.

- The gains in the yellow metal followed weak producer price index inflation data on Tuesday, which bolstered expectations that the Federal Reserve might cut interest rates by 50 basis points in September, although markets were still pricing in the possibility of a 25 basis point cut.

- The weak PPI reading increased expectations for a decline in the consumer price index due later on Wednesday, which might also show a drop in inflation for July.

- Lower interest rates are a positive scenario for gold, as they reduce the opportunity cost of investing in non-yielding assets.

- Gold also saw increased safe-haven demand this week after reports suggested that Iran was planning a military strike, potentially leading to a broader conflict in the Middle East.

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