Gold Prices Soar as Inflation Data Damps Rate-Hike Fears

Gold prices soared to multi-week highs on Wednesday, fueled by a decline in expectations of Federal Reserve rate hikes following inflation data that matched analyst forecasts. The US Consumer Price Index showed annual inflation of 3.4% on the headline measure and 2.5% on the 'core' CPI excluding fuel and food.

This development has led to a 10% increase in gold prices month-to-date in August, with the precious metal reaching $4430 per ounce. The US Dollar price of gold swung $85 within 5 minutes of the Bureau of Labor Statistics issuing its inflation report.

Rhona O'Connell at brokerage StoneX notes that 'the technical picture has now improved for both gold and silver', citing support from their respective 50-day moving averages, but also warning of resistance from the 200-day levels. Silver peaked near $67 per ounce before dropping back after the US inflation data.