Precious Metals Rally as CPI Report Matches Expectations

The precious metals market saw gold and silver prices rise on Wednesday after the July Consumer Price Index (CPI) report matched expectations. The report showed a 0.1% increase in headline CPI and a 3.4% year-over-year rise, with core CPI rising 0.2% on the month and 2.5% from last year.

The Federal Reserve's rate hike decision remains uncertain, with the market-implied probability of a 25-basis-point September hike remaining near 48%. The 10-year Treasury yield is trading at around 4.7%, while the US dollar is softer.

Oil prices remain elevated, with Brent crude holding near $89 a barrel and U.S. crude near $84. This has kept fuel costs high and maintained inflation expectations, which could limit how far markets can price out additional Fed tightening.

The Strait of Hormuz shipping disruption continues to impact oil prices, with Iran demanding US concessions before any full reopening. Regional shipping stress also remains broader than the Hormuz issue, with attacks in the Bab el-Mandeb Strait putting alternative routes under pressure.