Gold Soars to Two-Month High as US Inflation Data Dampens Rate Hike Bets
Gold prices surged to a two-month high on Wednesday after US inflation data matched expectations, bolstering bets that the Federal Reserve will keep interest rates steady in September.
Spot gold rose 0.9% to $4,406.64 per ounce by 1:30 p.m. EDT (1730 GMT), climbing above its 100-day moving average of $4,387.22 and reaching its highest level since June 5.
The data showed US consumer inflation increasing slightly in July, which could weaken the argument for an interest rate hike from the Fed next month.
According to Marex analyst Edward Meir, 'The CPI data has been encouraging. It was higher than last month, but it was in line with estimates, along with a weaker dollar and technicals which have all helped gold piggyback on it.'
Traders are now pricing in about a 40% chance of an interest rate hike at the Fed's September meeting, down from 46% before the inflation data.