Gold tops $4,400 as cooling US inflation lifts Fed cut bets

Metric	Value
Spot gold	$4,412.80/oz, +0.7%
7-day gain	+8.58%
1-year gain	+29.57%

Spot gold traded at $4,412.80 an ounce, up 0.7 percent, after cooling US inflation data raised expectations that the Federal Reserve will cut interest rates.

"Gold is breaking away from the downward pattern that has held since March, and its ability to rise alongside higher oil prices and a stronger dollar shows traders are pricing the metal from a different perspective," Hebi Chen, an analyst at Vantage Markets in Melbourne, said.

The move extends a recovery from a mid-June dip below $4,300. Gold gained 3.6 percent over the previous two sessions and has risen 8.58 percent over seven days, according to market data. The consumer price index is expected to rise 0.1 percent in July after a 0.4 percent decline the prior month, based on the median forecast in a Bloomberg survey of economists.

Central bank purchases in the first quarter of 2025 were the strongest on record for that period, according to the World Gold Council, with buying concentrated in emerging markets diversifying reserves away from the dollar. Gold remains about 17 percent below its level before the war with Iran began in late February. The July CPI release on Wednesday and subsequent Fed commentary are the next catalysts.

Inflation Data Sets Up Fed Rate Path

The cooling inflation print supports the case for the Fed to ease policy, which lowers the opportunity cost of holding non-yielding gold. Cleveland Fed President Beth Hamaek said several rate increases may be needed to bring inflation to the central bank's 2 percent target, and she was one of three officials who opposed last month's decision to hold borrowing costs unchanged. President Donald Trump said he has spoken with Fed Chairman Kevin Warsh only once, briefly, since Warsh took office in May.

Central Bank Demand and Technical Levels

The break above the 100-day moving average on Monday triggered technical buying, another sign of recovery after buyers appeared at lower prices and inflows to gold-backed exchange-traded funds in China increased. Silver rose 0.2 percent to $65.89 an ounce, while platinum and palladium also gained. Gold's one-year gain of 29.57 percent contrasts with a 13.40 percent decline over six months, while the Bloomberg Dollar Spot Index fell 0.1 percent after rising 0.2 percent in the prior session.

This article is for informational purposes only and does not constitute investment advice.