Why is the Newcrest share price losing its shine on Wednesday?

The Newcrest Mining Ltd (ASX: NCM) share price is losing ground along with the ASX 200 on Wednesday.

At the time of writing, shares in Australia's largest gold mining company are down 2.77% to $17.23.

In comparison, the S&P/ASX 200 Index (ASX: XJO) is in the red by 2.49% following a strong sell-off on Wall Street overnight.

What's going on with the Newcrest share price?

The Newcrest share price is coming under selling pressure today as the price of gold fell to US$1,700 per ounce.

Just the day before, the yellow metal was fetching as high as US$1,730 as investors were confident that inflation hit its peak.

However, the release of the consumer price index report for August showed inflation rose by 0.1% on a monthly basis.

Economists were predicting that inflation for the month would actually fall by 0.1% as fuel prices declined by 5.9%.

Nonetheless, this sparked a sell-off as investors weighed up the likely move of a more aggressive rate hike by the US Federal Reserve.

The central bank's chair, Jeremy Powell has previously said that he is determined to cool inflation despite bringing pain to consumers.

The market was expecting the Federal Reserve to raise interest rates by 0.75 percentage points at its 21-22 September meeting.

However, economists are fearing that this could be lifted by a full percentage point instead.

Consequently, this is having a negative impact on the price of gold as investors shift to other asset classes such as government bonds.

In addition, Newcrest shares are being weighed down by the S&P/ASX All Ordinaries Gold Index (ASX: XGD).

Currently, the benchmark index for Australian gold companies is one of the worst performers across the ASX, down 3.73%.

Newcrest share price summary

Adding to today's losses, the Newcrest share price has fallen 30% in 2022.

With Newcrest shares losing their glitter for now, they remain around 4% off their multi-year low of $16.56 earlier this month.

Based on today's price, Newcrest commands a market capitalisation of approximately $15.83 billion.