Gold Prices Climb as Cooling CPI Data Tempers Federal Reserve Hike Bets

Headline CPI rose 0.1% for the month of July, bringing the annual rate to 3.4%. Core inflation figures showed a monthly increase of 0.2%, or 2.5% year-over-year. Following the release, the probability of a September rate hike dropped from 48% to approximately 40%. This shift provided a tailwind for non-yielding assets, with spot gold climbing 0.90% to $4,406.20 an ounce and silver gaining 0.89% to $65.140.

Despite the relief in bond yields, persistent energy-linked inflation risks continue to complicate the market outlook. Geopolitical friction in the Strait of Hormuz remains a primary concern for investors, as constrained shipping routes and depleting inventory buffers keep oil prices elevated. Nymex WTI crude currently trades near $83.20 a barrel, a factor that prevents a full dovish reset of Fed expectations. While gold bulls eye a move toward the $4,500 resistance level, the ongoing tension between lower yields and energy-driven inflation keeps the metals market in a delicate, two-sided trade.