XAU/USD falls 1.37% after July Core PCE inflation holds at 3.3%, reinforcing expectations of a Fed rate increase in Q2 2026.
Gold prices retreated over 1.37% on Wednesday, trading below $4,600 after US inflation data matched expectations, bolstering bets for a Federal Reserve rate hike. The Core Personal Consumption Expenditures (PCE) Price Index remained at 3.3% year-over-year in July, aligning with estimates and June’s reading.
Headline inflation held steady at 3.7% for the second consecutive month, exceeding forecasts of 3.6%. The data raised the probability of a December rate increase to 77%, according to market pricing. US GDP growth in Q2 2026 met estimates, while durable goods orders surged to 1.1% month-over-month, doubling June’s 0.5% print.
Geopolitical tensions, including rising energy prices and conflicts in Ukraine and the Middle East, added volatility but failed to offset the hawkish Fed outlook.