Gold rallied to a nine-week high on Wednesday after the latest US consumer price index (CPI) data eased inflation concerns and reduced expectations of a Federal Reserve interest rate hike.
Spot gold climbed as much as 1.6% to more than US$4,439 ($6,277) an ounce, while gold futures surged to the US$4,500 level in New York.
The July CPI showed consumer prices rising 0.1% month-on-month and 3.4% year-on-year, both in line with expectations.
The data eased some concerns over persistent inflation and reduced expectations of an imminent Fed rate hike, helping support both gold and equities.
Bullion is coming off its strongest weekly performance since January, helped by weaker-than-expected US employment data that prompted traders to scale back expectations for higher interest rates.
Markets are now pricing in around a 50% chance of a September rate hike, down from 60% before the jobs report, according to the CME FedWatch Tool.
Chicago Federal Reserve President Austan Goolsbee, however, said earlier that he remains more concerned about elevated inflation than weakness in the labour market.
Meanwhile, the US dollar and oil prices slipped amid signs of easing tensions in the Middle East, providing further support for bullion. However, inflation risks remain as long as the US-Iran conflict remains unresolved.
Holding support
“Gold has defended the downside but has yet to confirm a renewed bull-market advance,” Ole Hansen, head of commodity strategy at Saxo Bank, said in a note cited by Bloomberg.
Hansen identified US$4,200 an ounce as the next important support level for gold.
Gold has moved firmly above the key US$4,000 level in recent weeks, supported by renewed investor appetite and stronger central bank purchases, particularly from China.
The yellow metal is now up nearly 1% year-to-date, reversing losses from its months-long slump and moving back into positive territory for 2026.
Write to Jackson Chen at Mining.com.au
Image: Kinross Gold
