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Gold climbs to more than two-month high after US inflation in line

Spot gold rose 0.9% to $4,406.64 per ounce, helped by a pullback in September rate-hike odds to about 40%.

Reported · Written up by our desk · Precious Metals

Gold prices rose to a more than two-month high on Wednesday after a U.S. inflation reading matched expectations, strengthening the case that the Federal Reserve will keep rates on hold in September, Reuters reported.

By 1:30 p.m. EDT, spot gold was up 0.9% to $4,406.64 per ounce and moved above its 100-day moving average of $4,387.22, with the metal climbing more than 1% earlier to its highest level since June 5.

The July U.S. consumer inflation data showed a 0.1% increase, in line with estimates after a 0.4% decline in June, which weighed on arguments for an additional rate hike. According to the CME FedWatch Tool, traders priced in roughly a 40% chance of a September hike, down from 46% before the inflation release.

Marex analyst Edward Meir said the CPI data was encouraging because it was higher than the prior month but still matched estimates, and he cited a weaker dollar and technical factors supporting gold. He also noted that renewed shipping disruptions tied to the U.S. and Yemen's Iran-aligned Houthis could push oil higher, potentially tightening financial conditions and making gold less attractive, while spot silver was up 1.3% to $65.49 per ounce, its highest level since June 22.

Latest closeGold $4,467.10 ▲1.9%|Silver $65.49 ▲1.1%

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