Gold traded near $4,700 an ounce on Wednesday, coming under pressure after stronger-than-expected US inflation data dampened expectations of Federal Reserve rate cuts. US consumer inflation accelerated to 3.8% in April, above the market forecast of 3.7% and marking the highest level since May 2023, as rising energy costs linked to the Middle East conflict drove prices higher.
In response, investors now largely anticipate that the Fed will keep interest rates unchanged for the rest of the year, while markets have also started to price in the possibility of a rate hike in April next year. President Donald Trump announced new measures aimed at easing consumer costs, with a particular focus on beef and gasoline prices, as his administration faces growing political pressure ahead of the November midterm elections.
At the same time, oil prices have rallied over the past three sessions, as diplomatic efforts to resolve the US-Iran war remain stalled, keeping inflation and energy market risks firmly in the spotlight.
