Weaker USD and softer CPI data fail to lift gold, as Fed signals potential year-end rate hike amid inflation concerns.
Gold (XAU/USD) trades with modest losses in Asian hours, remaining above the $4,000 mark despite a weaker US Dollar. The decline follows softer US Consumer Price Index (CPI) data, which showed a 0.4% drop in June—the largest since April 2020—missing forecasts of a 0.1% decline.
Annual headline CPI slowed to 3.5%, while core CPI eased to 2.6%, both below expectations. The data initially trimmed Fed rate hike bets, pushing the USD to a near four-week low. However, Fed Chair Kevin Warsh’s congressional testimony reinforced the central bank’s commitment to price stability, keeping the door open for further tightening.
Elevated crude oil prices, driven by US-Iran tensions and supply concerns, add to inflation worries, capping gold’s upside despite the softer USD.