Gold Surges Past $4,400 Amid US Rate Hike Uncertainty
Gold prices surged past $4,400 per ounce on Wednesday, reaching a more than two-month high. The gain was driven by the US's July Consumer Price Index (CPI) data matching market expectations, a reduced probability of a Federal Reserve rate hike in September, and a weaker dollar.
CME Group's FedWatch tool showed traders now assign roughly a 40% probability of a rate hike at the Fed's September meeting, down from 46% before the CPI release. Analysts warned that if US-Iran conflict escalates and drives oil back to $100 per barrel, a reversal in rate expectations could pressure gold prices.
Spot gold rose 0.9% on Wednesday to settle at $4,406.64 per ounce, successfully closing above the 100-day moving average of $4,387.22. Marex analyst Edward Meir noted: 'The CPI data is encouraging. While higher than last month, it met market expectations, and combined with a weaker dollar and technical factors, all helped gold ride this rally.'