Gold rises to over two-month high as US inflation data dampens rate hike bets

Published Thu, Aug 13, 2026 · 07:53 AM

GOLD rose to a more than two-month high on Wednesday (Aug 12) after a US inflation reading matched expectations, bolstering bets that the US Federal Reserve will keep rates on hold in September.

Spot gold rose 0.9 per cent to US$4,406.64 per ounce by 1.30 pm EDT (1730 GMT), and climbed above the 100-day moving average, which is currently at US$4,387.22. Bullion climbed more than 1 per cent to its highest level since Jun 5 earlier in the session.

US gold futures settled 0.6 per cent higher at US$4,467.50.

US consumer inflation increased slightly in July, potentially weakening the argument for an interest rate hike from the US Fed in September. It edged up 0.1 per cent in July, on par with estimates, after dropping 0.4 per cent in June.

“The CPI data has been encouraging. It was higher than last month, but it was in line with estimates, along with a weaker dollar and technicals which have all helped gold piggyback on it,” Marex analyst Edward Meir said.

Traders are now pricing in about a 40 per cent chance of an interest rate hike at the US Fed’s September meeting, down from 46 per cent before the inflation data, according to the CME FedWatch Tool.

The US Fed, on Jul 29, left the benchmark policy rate unchanged in the 3.5 to 3.75 per cent range, though three of 12 voting policymakers dissented, favouring a rate hike instead.

A higher interest rate environment tends to reduce the appeal of non-yielding gold.

Attention now shifts to the Producer Price Index, due on Thursday.

Meanwhile, the US and Yemen’s Iran-aligned Houthis reported separate attacks on shipping on Tuesday as prospects for ending the Iran war appeared to dim.

“A resumption of the hostilities can make oil move back up towards the US$100 mark, in which case you could see interest rates move up and gold could struggle,” Meir said.

Among other metals, spot silver rose 1.3 per cent to US$65.49 per ounce, having hit its highest level since Jun 22 earlier in the session.

Platinum rose 0.9 per cent to US$1,759.50, and palladium gained 0.5 per cent to US$1,367.23. REUTERS