U.S. CPI Meets Expectations, Gold Rises to Two-Month High
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U.S. July CPI rose 0.1% month-on-month, in line with forecasts. Spot gold climbed nearly 1% to $4,406.64 an ounce — a two-month high — as traders cut the probability of a Fed September hike from 46% to roughly 40%.
What did the CPI number actually say?
July CPI rose 0.1% month-on-month, exactly matching consensus; June had fallen 0.4%.
This means → inflation didn't accelerate, but it didn't keep cooling either — a flat reading was enough for markets to cheer.
Marex analyst Edward Meir: "The CPI data is encouraging. Although higher than last month, it was in line with expectations, and combined with a weaker dollar and technical support, it drove gold higher."
How much did gold gain, and why?
By 1:30 p.m. ET, spot gold was up 0.9% at $4,406.64 an ounce, having touched its highest since June 5 after rising more than 1% intraday.
Gold also broke above the 100-day moving average — the average closing price over the past 100 trading days, a widely watched trend line — currently at $4,387.22. In plain terms = once price clears that line, technical traders read the trend as "up."
U.S. gold futures settled up 0.6% at $4,467.5 an ounce.
Will the Fed hike in September?
The CME FedWatch Tool — which backs out rate-decision bets from futures prices — now shows traders pricing a September hike at roughly 40%, down from 46% before the CPI release.
This means → the data nudged markets further toward "no hike" — money is voting for a hold.
Context: the Fed held rates at 3.50%–3.75% on July 29, but 3 of 12 voting members dissented in favor of hiking. This reflects a still-divided committee on the inflation outlook.
What could push gold back down?
Meir flagged a downside risk: the U.S.–Houthi shipping conflict in Yemen remains unresolved.
If escalation drives oil back toward $100 a barrel → inflation pressures reignite → rate expectations reverse → gold faces selling pressure.
In plain terms = oil is inflation's fuse — a price spike could force the Fed's hand on hikes, and hikes are bearish for gold.
What about other metals, and what's next?
Silver rose 1.3% to $65.49 an ounce, its highest since June 22; platinum gained 0.9% to $1,759.50; palladium added 0.5% to $1,367.23.
Next catalyst: Thursday's U.S. July PPI — the Producer Price Index, which tracks factory-gate prices and is often seen as an upstream signal for CPI.
This means → a tame PPI would further cement the "no September hike" narrative; a hot print could flip sentiment again.
Content is for reference only, not financial advice.