Gold fell sharply at the end of the Asian trading session by 0.18% after coming close to hitting an all-time high of $2,529.
US inflation data prompted market participants to reduce positions in the yellow metal following the growing possibility that the Federal Reserve (Fed) will begin its easing cycle by 25 basis points.
At 9.30am, the price of gold was at $2,514.27, up slightly by 0.10% since it opened in early trading on Wednesday.
For now, market sentiment remains positive after the US Bureau of Labor Statistics released the Consumer Price Index (CPI) for August. Monthly headline inflation remained unchanged and monthly core excluding energy rose 10%.
However, US Treasury yields edged higher amid concerns that the Fed may not be able to cut rates by 50 basis points as few markets had previously expected.
Meanwhile, the presidential debate between Kamala Harris and Donald Trump recorded a high score for the vice president of the Democratic Party.
As for geopolitical issues, US Secretary of State Anthony Blinken and UK's David Lammy raised concerns that the US and the UK could give Ukraine the ability to use weapons from Western countries to attack Russia.
