Gold News & Info

Source:Bill Musgrave, American Gold Exchange

AustinNew York spot gold fell 1.1% to close under $2,440 after consumer inflation rebounded slightly, decreasing the odds of an oversized rate cut from the Fed in September. Silver lost 1.3% to finish at $27.35 an ounce.

The consumer price index rose a modest 0.2% in July, pulling the 12-month inflation rate down to 2.9%, the lowest since early 2021. Combined with yesterdays mild PPI, the data confirmed that inflation is solidly back on a downward trend, all but guaranteeing a rate cut from the Fed in September.

Although the July CPI was exactly as forecast, the markets were disappointed that it wasnt even weaker, which would have increased the chances of a bigger rate reduction. While the likelihood of a quarter-point cut remains 100%, according to CME FedWatch, the odds of a half-point cut have fallen to 38% from 53% yesterday and nearly 70% a week ago.

Still, benchmark 10-year Treasury yields edged back to 3.8% while the dollar dipped slightly.

Despite todays correction, gold remains solidly underpinned by the certainty of coming rate cuts and strong safe-haven demand from escalating geopolitical tensions in the Middle East and Ukraine.

Platinum dropped 1.7% and palladium 0.2%.

At the New York spot close: gold shed $27.30 to $2,439.40; silver slid 35 cents to $27.35 platinum retreated 16.30 to $929.60; and palladium dipped $1.80 to $922.70 an ounce.