XAU/USD climbs 1.5% after US consumer inflation data undershoots forecasts, reducing Fed rate hike expectations.
Gold prices surged 1.5% to $4,050 as US consumer inflation data fell short of estimates, easing pressure on the Federal Reserve to tighten monetary policy further. The move followed a rebound from daily lows, driven by reduced expectations for rate hikes ahead of 2026.
Prior to the release, markets had priced in a higher inflation print, which could have reinforced hawkish Fed sentiment. The softer data instead fueled speculation that the central bank may pause or slow its tightening cycle, weakening the USD and boosting demand for non-yielding assets like gold.
XAU/USD’s gain reflects a broader shift in investor sentiment, as traders recalibrate bets on Fed policy in response to cooling inflationary pressures.