World gold prices still fall despite the recovery of US CPI

The current price of gold on the Kitco exchange stands at $1,913.34 per ounce, experiencing a slight decline of $3.34 compared to the previous session.

According to the U.S. Labor Department, there was a 0.2% increase in the consumer price index (CPI) last month, matching the gains recorded in June. However, over the course of 12 months through May 7th, CPI rose by 3.2%, surpassing June's gain of 3%. This marks the most significant annual increase since March 2021. These figures align with expectations.

Despite maintaining its previous gains, the gold market did not exhibit much reaction to this latest inflation data because it does not offer clear indications regarding future movements in US interest rates. However, it is anticipated that until year-end, the Federal Reserve will likely maintain unchanged interest rates.

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“With CPI continuing to taper off, that suggests there is less room for the Fed to keep raising rates, especially at the September meeting.”

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The Federal Reserve cannot afford to cut interest rates as soon as core inflation remains above its 2% target.

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Because the market has just witnessed the consumer price index (CPI) of July and producer prices (PPI) of China both decrease over the same period. This is a signal of deflationary pressure as demand in the world's second-largest economy weakens. Economic weakness, gold will have the opportunity to go up.

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Over the past week, gold has been on a downward trend with the price down 1% in the context of inflationary pressure on the US economy. Currently, gold market participants are still divided on whether the final rate hikes of the US Federal Reserve (Fed) will have more hikes.