XAU/USD rises nearly 1% after weaker US inflation data lowers expectations for further Federal Reserve tightening.
Gold prices surged nearly 0.90% to $4,386 as the US Dollar weakened following softer-than-expected inflation data. The decline in inflation metrics reduced market bets on another Federal Reserve rate hike, boosting demand for non-yielding assets like gold.
Prior to the rally, XAU/USD had struggled to breach the $4,400 mark, reflecting cautious sentiment amid mixed economic signals. The latest data contrasts with earlier expectations of sustained monetary tightening, shifting investor focus toward potential policy easing.
The move underscores growing speculation that the Fed may pause or slow its rate-hike cycle, supporting gold’s appeal as a hedge against economic uncertainty.