The impact of “low inflation” on gold prices

Gold prices held above $2,400 an ounce after the release of weaker-than-expected U.S. inflation data.

Data released yesterday in the United States showed that consumer prices rose 3% year-on-year, lower than expected. Expectations for a rate cut have increased as data and comments from Fed officials indicate that inflation is under control.

Before the September interest rate cut data was released, market expectations were 70%, and are currently around 93%.

Gold prices, which were trading near record highs yesterday, fell slightly this morning following the data. The precious metal was poised for its third straight weekly gain as weaker-than-expected U.S. inflation data boosted hopes of a rate cut.

Gold market updates

As expectations grew that the Federal Reserve will begin cutting interest rates in September, gold prices rose 1.9% yesterday to close at $2,000,415, the highest daily close in nearly two months. The price currently seeking buyers is $2,000,409, down 0.2%.

The gold price opened at 2000-555 liras on the day, close to yesterday’s record level. Quarter gold was sold for 4,000 174 liras, and Republic gold was sold for 16,006 646 liras.

Will it reach record levels?

“The inflation outlook and interest rate charts are positive for gold this week. As we approach a lower interest rate environment, conditions could be ripe for gold to set new record highs by year end,” said Tim Waterer, chief market analyst at KCM Trade.

Waterer also commented that “PPI data will likely play a key role in determining which side of the $2,400 level gold will move to this week.”