WS Investor
12 Aug 2026, 15:16
Gold Rises 0.8% as Softer U.S. Inflation Eases Fed Rate-Hike Concerns
Gold prices extended gains on Wednesday following the release of U.S. inflation data, as cooling annual price pressures reduced expectations for further Federal Reserve tightening and weighed modestly on the U.S. dollar.
December COMEX gold futures were up around 0.8%, trading near $4,477 per ounce and reaching intraday levels close to $4,500. The metal had traded around $4,450 earlier in the session before strengthening around the U.S. CPI release.
U.S. CPI Supports Gold
July's Consumer Price Index rose 0.1% month-over-month and 3.4% year-over-year, both matching expectations. Annual inflation nevertheless eased from 3.5% in June.
Core inflation also moderated. Core CPI increased 0.2% monthly, while the annual rate declined to 2.5% from 2.6%, again matching forecasts.
While the report did not deliver a downside surprise, the continued moderation in annual headline and core inflation reduced concerns that the Fed could need to tighten policy further. The probability of a September rate increase fell, while the dollar index slipped following the report.
That combination is supportive for gold. Lower expectations for interest-rate increases reduce the opportunity cost of holding the non-yielding metal, while a weaker dollar makes bullion less expensive for holders of other currencies.
For now, Wednesday's CPI report has reduced immediate monetary-policy concerns. Gold's move toward $4,500 suggests investors are focusing on the combination of easing U.S. inflation, a softer dollar and persistent geopolitical uncertainty, leaving the precious metal firmly higher during the session.
Gold prices extended gains on Wednesday following the release of U.S. inflation data, as cooling annual price pressures reduced expectations for further Federal Reserve tightening and weighed modestly on the U.S. dollar.
December COMEX gold futures were up around 0.8%, trading near $4,477 per ounce and reaching intraday levels close to $4,500. The metal had traded around $4,450 earlier in the session before strengthening around the U.S. CPI release.
U.S. CPI Supports Gold
July's Consumer Price Index rose 0.1% month-over-month and 3.4% year-over-year, both matching expectations. Annual inflation nevertheless eased from 3.5% in June.
Core inflation also moderated. Core CPI increased 0.2% monthly, while the annual rate declined to 2.5% from 2.6%, again matching forecasts.
While the report did not deliver a downside surprise, the continued moderation in annual headline and core inflation reduced concerns that the Fed could need to tighten policy further. The probability of a September rate increase fell, while the dollar index slipped following the report.
That combination is supportive for gold. Lower expectations for interest-rate increases reduce the opportunity cost of holding the non-yielding metal, while a weaker dollar makes bullion less expensive for holders of other currencies.
For now, Wednesday's CPI report has reduced immediate monetary-policy concerns. Gold's move toward $4,500 suggests investors are focusing on the combination of easing U.S. inflation, a softer dollar and persistent geopolitical uncertainty, leaving the precious metal firmly higher during the session.
