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Gold steadied on Wednesday after retreating immediately following data showing an acceleration in U.S. consumer prices, on expectations that the inflation readings may not prompt a big change in the Federal Reserve's interest rate strategy.

Spot gold was steady at $1,912.86 per ounce by 9:05 a.m. EDT (1305 GMT. U.S. gold futures were also steady at $1,935.40 per ounce.

The Labor Department data showed headline and core CPI in August rose 0.6% and 0.3%, respectively, month-on-month. Economists were expecting increases of 0.6% and 0.2%, respectively.

However, traders' expectations for the Fed leaving interest rates unchanged at its Sept. 19-20 policy meeting only got stronger after the data, while pricing around a 44% chance of another hike before 2024, according to the CME FedWatch tool.

"Precious metal investors are less worried about higher inflation and more focused on the opportunity costs associated with holding a non-interest bearing asset in a rising rate environment," said Chris Gaffney, president at EverBank World Markets.

But "focus now shifts to the retail sales numbers which some investors feel is an even more important indicator than the CPI info we got today."

Higher interest rates boost yields on competing safe-haven U.S. Treasury bonds, drawing investors away from zero-interest-bearing bullion. [US/]

Investors are now looking forward to U.S. August producer prices and retail sales data and the European Central Bank's rate hike verdict on Thursday ahead of the Fed's Sept. 20 policy decision.

Silver shed 0.6% to $22.98 per ounce, touching a three-week low. Platinum fell 1.2% to $899.71 and palladium dipped 0.5% to $1,234.51.