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Gold slips back below $4,000 as Fed outlook stays hawkish

Commerzbank flagged that, despite a brief boost from softer US inflation data, markets are now pricing only one 25-basis-point Fed hike by year end.

Reported · Written up by our desk · Precious Metals

Gold prices slipped back below USD 4,000 per troy ounce after a brief rally tied to weaker US inflation data faded, according to commentary shared by Commerzbank through FXStreet.

Commerzbank analyst Thu Lan Nguyen said the softer consumer and producer price readings in June dampened expectations for additional Fed rate hikes. She noted that the market had previously priced nearly two hikes by year end, but now fully prices just a single 25-basis-point increase.

Despite the data driven repricing, the gold bounce proved short lived, with the price falling back under the 4,000 level. Commerzbank pointed to persistent expectations for further hikes in the near term.

Nguyen also cited ongoing escalation of the Middle East conflict as a key factor keeping interest rate expectations elevated through potential energy-price risk. She added that a more dovish Fed stance later could revive upside for gold, while referencing views from US policymakers that inflation could face longer term downward pressure.

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