Gold Prices Soar to Two-Month High on Eased Rate Hike Expectations

Gold prices have reached a two-month high following the release of a cooler Consumer Price Index (CPI) report in the US. The report, which showed a 0.1% increase in headline CPI and a 3.4% year-on-year rise, has reduced expectations for a Federal Reserve interest rate hike in September.

The likelihood of a rate hike has fallen to approximately 40%, down from roughly 48% the previous day, as Treasury yields have eased. Spot gold prices have surged by 0.90% to $4,406.20 per ounce, while spot silver is trading at about $65.140, reflecting a gain of 0.89% for the session.

The technical landscape for gold appears two-sided, with lower yields typically bolstering interest in non-yielding metals like gold, but ongoing tensions related to shipping through the Gulf region keeping oil prices elevated and complicating expectations around potential relief from Federal Reserve rate hikes.