XAU/USD drops to its lowest level since November 2025 as US CPI rises 4.2% YoY, reinforcing expectations for prolonged Fed tightening.
Gold prices fell to around $4,050 per ounce, the lowest since November 2025, as US inflation data bolstered expectations for higher-for-longer Federal Reserve interest rates. The decline accelerated during early Asian trading on Thursday amid heightened geopolitical tensions in the Middle East.
The US Consumer Price Index rose 4.2% year-over-year in May, up from 3.8% in April, marking the highest level in three years. Monthly CPI increased 0.5%, matching analyst forecasts, while core CPI climbed 2.9% annually. The data reinforced market bets that the Fed may raise rates by year-end despite a widely expected pause in June.
Geopolitical risks, including US strikes in Iran, failed to support gold, which remains pressured by rising yields and a stronger USD. Futures markets now price in a higher probability of Fed tightening by December.