Gold Rallies as Cooling US CPI Pressures Dollar
Gold prices rose more than 2% on Tuesday after weaker-than-expected US inflation data increased expectations that the Federal Reserve could adopt a less aggressive policy stance US consumer inflation slowed to 3.5% annually in June from 4.2% in May, while core CPI remained unchanged after a 0.2% monthly increase, prompting traders to abandon July rate hike expectations. Markets now await Federal Reserve Chair Kevin Warsh's congressional testimony and Wednesday's US Producer Price Index data for fresh signals on inflation and future monetary policy direction. Iran launched ballistic missiles at a US air base in Jordan, while US forces struck Iranian targets near the Strait of Hormuz, lifting oil prices and boosting demand for safe-haven gold. "Gold is showing unexpected resilience, suggesting markets may increasingly be focusing on the broader economic consequences of a prolonged energy shock rather than simply its inflationary impact," wrote Ole Hansen, head of commodity strategy at Saxo Bank, in a Tuesday note. At the time of writing, XAU/USD was trading at $4,081, up 2%.
Gold prices rose more than 2% on Tuesday after weaker-than-expected US inflation data increased expectations that the Federal Reserve could adopt a less aggressive policy stance US consumer inflation slowed to 3.5% annually in June from 4.2% in May, while core CPI remained unchanged after a 0.2% monthly increase, prompting traders to abandon July rate hike expectations.
Markets now await Federal Reserve Chair Kevin Warsh's congressional testimony and Wednesday's US Producer Price Index data for fresh signals on inflation and future monetary policy direction.
Iran launched ballistic missiles at a US air base in Jordan, while US forces struck Iranian targets near the Strait of Hormuz, lifting oil prices and boosting demand for safe-haven gold. "Gold is showing unexpected resilience, suggesting markets may increasingly be focusing on the broader economic consequences of a prolonged energy shock rather than simply its inflationary impact," wrote Ole Hansen, head of commodity strategy at Saxo Bank, in a Tuesday note.
At the time of writing, XAU/USD was trading at $4,081, up 2%.