Slight Increase in Gold Prices Amid Anticipation of US Inflation Data and Federal Interest Rate Paths

Gold markets on Tuesday, August 12, witnessed a slight improvement in prices after a significant decline during the previous session, as investors' attention turns to US inflation data that could determine the course of monetary policy for the Federal Reserve in the upcoming period.

Spot gold recorded an increase of 0.2% to reach $3352.99 per ounce, while December futures contracts remained stable at $3404.70. This improvement came after a sharp drop on Monday of 1.6% for spot gold and more than 2% for futures contracts, following US President Donald Trump's announcement to exempt imported gold bars from tariffs, which eased market concerns.

For his part, Kelvin Wong, senior market analyst at OANDA, indicated that market participants are currently focusing on expectations for the Fed to cut interest rates, which is expected to occur next September. He added: "If the core Consumer Price Index data comes in slightly below expectations, it may support rate cut expectations, reducing the cost of holding gold and boosting demand for it."

The importance of inflation data, scheduled to be announced at 12:30 GMT, is increasing, as economists - according to a Reuters survey - expect the core index to rise by 0.3% in July, bringing the annual rate to 3%. Market expectations indicate an 85% probability of the Fed cutting rates next month, according to the CME Group's FedWatch tool.

In a separate context, statements from a White House official regarding the extension of the suspension of tariffs on Chinese imports for an additional 90 days did not significantly impact trading activity in the gold market.

Other precious metals also saw improvements, with spot silver rising by 0.7% to $37.88 per ounce, while platinum increased by 0.3% to $1330.25, and palladium rose by 0.9% to $1145.47.