Gold prices saw modest gains in early Wednesday trading, recovering from overnight losses triggered by stronger-than-expected U.S. inflation data. Spot gold rose 0.4% to $3,339.26 an ounce, while September gold futures edged up 0.3% to $3,345.40.
The mild rebound followed a brief dip caused by a firmer U.S. dollar, which reached a three-week high after June’s Consumer Price Index (CPI) came in slightly hotter than anticipated. That reading led traders to scale back expectations of near-term Federal Reserve rate cuts.
Despite recent volatility, gold continues to trade within a $3,300–$3,500/oz range, where it has lingered for the past three months. Ongoing geopolitical tensions—ranging from U.S. trade tariffs to friction between Russia and Ukraine—continue to support safe-haven demand, though macroeconomic signals remain mixed.
Silver and Platinum Show Mixed Strength
While gold has struggled to gain significant traction, silver and platinum have outpaced it in recent months. Both metals hit multi-year highs earlier this year as investors searched for more affordable alternatives to gold, supported by supply constraints and improving demand projections.c
However, some profit-taking and waning Fed rate cut bets weighed on both metals this week:
- Spot platinum held steady at $1,421.00/oz
- Spot silver inched up to $37.8385/oz
These metals benefited earlier from stronger industrial demand expectations and tight global supply, though their short-term momentum now appears limited by macroeconomic headwinds.
Factors behind recent metal moves:
- Concerns about sticky U.S. inflation dampening rate-cut hopes
- Safe-haven bids balancing out stronger dollar pressure
- Speculation around overbought conditions in gold markets
- Heightened volatility driven by political and trade uncertainties
CPI Data and Tariff Tensions Pressure Metals
The June CPI reading, though only slightly above forecast, reinforced fears that U.S. inflation is becoming entrenched. That narrative has strengthened the dollar and prompted a cautious tone from the Federal Reserve, which has signaled it will hold interest rates steady until the effects of trade tariffs on inflation become clearer.
The CPI data also arrives amid renewed political tension. President Trump and his allies are intensifying criticism of Fed Chair Jerome Powell, pushing for rate cuts and even calling for leadership changes. This political backdrop adds further uncertainty to the Fed’s policy outlook.
Meanwhile, industrial metals showed muted responses:
- London copper futures flat at $9,639.70/ton
- U.S. copper futures dipped 0.4% to $5.4962/pound
With inflation, trade policy, and political friction all converging, traders across the metals space remain highly sensitive to economic data and central bank signals.
