FX.co ★ Gold Swings Around $3350

Spot gold prices remained steady at approximately $3,350 per ounce as traders evaluated the recent US Consumer Price Index (CPI) report. This report has reinforced the anticipation that the Federal Reserve will lower the federal funds rate in the upcoming month. In July, the headline annual inflation rate stabilized at 2.7%, slightly below the projected 2.8%, while core inflation rose unexpectedly to 3.1%. This indicates that inflationary pressures due to tariffs are currently limited, potentially allowing the Federal Reserve to implement a 25 basis point rate cut in September. The likelihood of a rate cut, which was at 88% yesterday, has now increased to nearly 93%. Concurrently, the US President declared via social media that "Gold will not be Tariffed!" but did not elaborate. Previously, the Financial Times had reported that US Customs and Border Protection decided that one-kilo and 100-ounce gold bars should be classified under a customs code that incurs levies. This was unexpected by the industry, which assumed they would be exempt. As a result, New York gold futures soared to unprecedented levels, and the premium between London and New York expanded.