Gold Notches Small Gain as US Inflation Data Aids Rate-Cut Bets

(Bloomberg) — Gold (GC=F) extended a modest gain, following a US inflation reading that was in line with expectations and reinforced wagers on the Federal Reserve cutting interest rates next month.

Bullion edged up after closing 0.2% higher in the previous session, after underlying US inflation accelerated to the strongest since the start of the year — though a tepid rise in goods prices eased concerns about tariff-driven pressures.

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The data boosted speculation that the Fed will reduce borrowing costs next month, especially given a softening labor market. Gold, which pays no interest, typically benefits in a lower rate environment.

COMEX - Delayed Quote•USD

(GC=F)

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3,415.90

+16.90

+(0.50%)

As of 6:15:59 AM EDT. Market Open. Advanced Chart

Traders are still on the lookout for clarification on whether gold bar imports would be subject to tariffs. The US Customs and Border Protection agency stunned the market last week by saying they would be subject to duties, which prompted a spike in the premium for gold futures in New York over the spot price in London. On Monday, Trump said there would not be a levy but didn’t elaborate.WATCH: Underlying US inflation accelerated in July to the strongest pace since the start of the year as the core consumer price index increased 0.3% from June. Michael McKee reports.Source: Bloomberg

Futures and spot prices continued to converge after Trump’s latest comments. The December contract on New York’s Comex held near $3,400 an ounce on Wednesday, while spot gold traded near $3,355 an ounce.

Gold has climbed about 28% this year, with the bulk of those gains in the first four months. It has been supported by heightened geopolitical and trade tensions that have spurred haven demand, along with strong central bank purchases.

Spot gold edged 0.4% higher to $3,360.70 an ounce at 8:25 a.m. in London. The Bloomberg Dollar Spot Index was down 0.1%, after posting a 0.4% loss on Tuesday. Silver climbed as much as 1.3%, while platinum and palladium also gained.

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