Gold prices rise as US producer price data reduces July Fed rate hike probability to 12%, down from 31% a week ago.
Gold extended gains for a second session after softer-than-expected US producer price data weakened the dollar and Treasury yields. The data eased inflation concerns, lowering expectations for near-term Federal Reserve tightening.
Markets now price only a 12% chance of a July rate hike, down sharply from nearly 31% a week earlier. Lower rate hike odds typically support non-yielding assets like gold, which has benefited from the shift in sentiment.
However, strategists warn that upside may remain limited if Middle East tensions keep energy prices elevated, sustaining inflation risks and capping bullion’s advance.