Gold rallied Wednesday after new data showed inflation in the United States was cooling, suggesting the Federal Reserve may only hike interest rates one more time this year.
Spot gold last gained 0.79% to $1,947.39 per ounce, while U.S. gold futures added 0.81% to $1,952.70.
The consumer price index rose just 0.2% in June, compared with forecasts for a gain of 0.3%. On an annual basis, U.S. CPI advanced 4.8%, lower than market expectations for a 5% increase.
Friday’s slower than expected jobs report wasn’t a game changer, but helped shift the mindset of investors, with many now expecting July to mark the end of the current hiking cycle, Evangelista added.
The end to Fed’s current monetary policy tightening cycle is getting close, several U.S. central bank officials also said on Monday. That helps bullion as it does not yield any interest.
Harshal Barot, senior consultant at Metals Focus, said that while a July rate hike is largely priced in, “if we see core inflation still being higher than expected, then I think the expectations of another rate hike coming September will start gaining traction.”
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