09:37 AM EDT, 09/10/2025 (MT Newswires) -- Gold traded at a record high for a third-straight day early on Wednesday after a report showed U.S. wholesale prices unexpectedly fell in August, clearing the way for the Federal Reserve to cut interest rates next week.

Gold for December delivery was last seen up US$4.20 to US$3.386.40 per ounce, rising off Tuesday's record close.

The rise comes after the U.S. Bureau of Labor Statistics reported the August Producer Price Index (PPI) fell by 0.1% from July, while the consensus estimate of analysts polled by FactSet expected a 0.3% rise. Core PPI, excluding volatile items, rose 0.3%, matching expectations, but down from a rise of 0.6% in July.

The drop in wholesale prices, the first since April, comes ahead of Thursday's release of the August consumer price index, which is expected to show a 0.3% monthly rise, up from 0.2% in July.

Neither report is likely to alter expectations the Federal Reserve will cut rates by 25 basis points at the Sept. 17 conclusion of its two-day policy meeting.

Expectations for rate cuts have supported gold's 8.1% gain over the past month, while safe-haven demand has also strengthened after Israel attacked senior Hamas members in Qatar, a US ally, and amid concerns over attacks on the Fed's independence by the Trump administration.

"Overnight dip-buying returned, supported by expectations of rate cuts, concerns over Fed independence, and lingering economic and geopolitical risks," Saxo Bank said.

The dollar was steady after the PPI release, with the ICE dollar index last seen up 0.01 points at 97.8. Treasury yields fell, easing the carrying cost of holding gold. The U.S. two-year note was last seen paying 3.527%, down 5.0 basis points, while the yield on the 10-year note was down 2.6 points to 4.061%.