Gold Sees Two-Month High as Inflation Eases and Rate Hike Expectations Fall

Gold prices surged to their highest level in over two months on Wednesday, driven by fresh signs of easing inflationary pressures in the US. The most-active contract closed at $4,467.50, marking a 0.59% increase from the previous day.

The data, which showed US consumer price inflation slowed to 3.4% in July, aligned with expectations. Core inflation, which excludes food and energy prices, eased to 2.5%, boosting hopes that the Federal Reserve will keep interest rates unchanged next month.

As a result, bets on a rate hike declined, supporting gold and other precious metals. The decrease in rate-hike expectations is seen as a positive sign for gold, which tends to perform well when interest rates are low or stable.