Gold Prices Stabilize Ahead of U.S. Inflation Report

Gold prices have shown signs of stability in anticipation of the highly anticipated U.S. inflation report. The recent decline in gold prices, driven by higher global bond yields and a stronger U.S. dollar, has prompted some recovery.

Price Action

• Gold futures for December delivery (SI00, +0.48% GCZ23, +0.20%) have gained $3.50, or 0.2%, reaching $1,954 per ounce on Comex.
• Silver futures for September delivery (SI00, +0.48% SIU23, +0.48%) have gained 9 cents, or 0.4%, reaching $22.83 per ounce.
• Palladium futures for September (PA00, +2.23% PAU23, +2.23%) have increased by $29, or 2.4%, reaching $1,260 per ounce.
• Platinum futures for October (PL00, +0.99% PLV23, +0.99%) have risen by $8.30, or 0.9%, reaching $901 per ounce.
• Copper futures for September delivery (HG00, +0.86% HGU23, +0.86%) have gained 4 cents, or 1%, reaching $3.82 per pound.

Market Drivers

The upcoming CPI report from the U.S. could be a critical moment for gold. The metal’s year-to-date gains have diminished as global bond yields and the U.S. dollar have strengthened in recent weeks.

If the report indicates another lower-than-expected reading, it would mark two consecutive months of price pressures declining faster than economists had anticipated. Analysts believe this could boost gold prices.

According to Craig Erlam, senior market analyst at OANDA, the U.S. has made significant progress in managing inflation, and there are expectations of further progress throughout the year. If this progress occurs at a faster rate than currently anticipated, gold prices could benefit.

In June, data revealed that inflation had slowed to its lowest level since August 2021. This news contributed to a rise in U.S. stocks and gold as investors speculated that the Federal Reserve would postpone another interest-rate hike in September.

Economists predict that for July, prices will have risen by 0.2%, consistent with the previous month’s pace.