09:18 AM EDT, 08/14/2024 (MT Newswires) -- Gold edged up to a fresh record early on Wednesday, even as Treasury yields moved up too after U.S. inflation rose less than expected last month, firming expectations the Federal Reserve will begin lowering interest rates next month.

Gold for December delivery was last seen up from Tuesday's record closing price, rising US$0.40 to US$2,508.20 per ounce.

The U.S. Bureau of Labor Statistics reported the July Consumer Price Index (CPI) fell to a 2.9% annualized pace from 3.0% in June and the consensus estimate for a 3.0% rise, according to Marketwatch. Core CPI, which excludes volatile food and energy, ran at a 3.2% pace last month, matching the consensus estimate and down from 3.3% in June.

The data follows on Tuesday's release of the July Producer Price Index (PPI) which also showed a lower than expected rise, firming market hopes the Federal Reserve will begin to cut interest rates at the September 18 meeting of its policy committee. Lower interest rates are bullish for gold, lowering the carrying cost of owning the precious metal.

The dollar fell following the data, with the ICE dollar index last seen down 0.2 points to 102.54.

Treasury yields also rose, bearish for gold since it pays no interest. The U.S. two-year note was last seen paying 3.977%, up 3.7 basis points, while the yield on the 10-year note was up 0.05 points to 3.851%.