Gold Stumbles as Softer Inflation Fails to Sustain Price Surge
Gold's recent price surge has come to an abrupt halt as investors take profits after softer US inflation data. Spot gold fell 0.5% to $4,326.75 an ounce by Friday morning GMT, while December US futures dropped almost 1% to $4,382.50. The precious metal had briefly reached its highest level since June 5 on Thursday before reversing sharply.
The decline comes despite the positive run of US data this week, which included a 3.4% year-on-year consumer inflation rate in July and unchanged producer prices. These numbers have reduced the implied probability of a September Federal Reserve rate increase to around 35%, from approximately 55% a week earlier.
Tastylive macro strategist Ilya Spivak views the recent decline as speculative investors locking in gains rather than a fundamental deterioration in gold's outlook. With no equally powerful catalyst immediately ahead, the market may need time to absorb its recent advance.