Gold slipped on this morning’s flat inflation report after hitting near a three-month high earlier Wednesday. The inflation report gives some support to interest rate hawks.
The personal consumption expenditures price index, the Federal Reserve’s favorite inflation measure, increased 3.7% in the 12 months through July, the Commerce Department’s Bureau of Economic Analysis said on Wednesday, slightly over the forecast of 3.6%. The Fed closely watches both inflation and labor market data when setting interest rates.
Over 59% of investors are betting on the Fed keeping interest rates unchanged again in September, even though minutes of the last Fed policy meeting, which came out last week, indicated broader support for rate increases if inflation doesn’t go down. Keeping rates unchanged would likely be bullish for gold, as higher rates make gold a less attractive asset for investment.
December gold futures fell $13.90 Tuesday to settle at $4,694.50 an ounce on Comex, though the front-month contract rallied 0.3% in the first two days of the week. Bullion is up 14% this month after gaining 1.7% in July, its first monthly increase since February, and sliding 12% in June. It decreased 7% in the first half of 2026 after rallying 64% last year. The December contract is currently down $0.290 (-0.42%) an ounce to $69.180 and the DG spot price is $68.44. The December contract is currently down $12.70 (-0.27%) an ounce to $4681.80 and the DG spot price is $4629.10.
Gold has technical support for a rally after rising about the 200-day moving average and as gold-back exchanged traded funds added more bullion last week.
Investors are also continuing to watch inflationary risk from the war in Iran and the subsequent closure of the Strait of Hormuz.
In addition to the PCE index, Fed policymakers and other central bankers will meet at the end of the week at the Fed’s annual conference in Jackson Hole, Wyoming, and Fed Chair Kevin Warsh is scheduled to make his first major speech since taking office earlier this year.
Separately, Boston Fed President Susan Collins said Tuesday that she supported holding rates steady at the next Fed meeting in September.
The central bank held interest rates steady at 3.5% to 3.75% last month, but dissenters signaled growing support for a rate hike in 2026. The Fed had previously been expected to raise rates next month. Higher rates are typically bearish for gold, making the yellow metal a less attractive asset.
Almost 60% of the investors tracked by the CME FedWatch Tool now expect rates will remain unchanged at the Fed’s next policy meeting in September, with the rest betting on a 25 basis point increase. The Fed has kept interest rates unchanged this year after three previous rate cuts.
December silver futures gained 0.1% Tuesday to settle at $69.47 an ounce on Comex, though the front-month contract fell 1.3% in the first two days of the week. The most-active contract touched a record above $115 in January. Silver is up 20% this month after sliding 3.6% in July and declining 21% in June. It lost 15% in the first half of 2026 after rising 141% last year. The December contract is currently down $0.290 (-0.42%) an ounce to $69.180 and the DG spot price is $68.49.
Spot palladium tumbled 2.8% Tuesday to $1,332.50 an ounce and is down 1.2% so far this week. Palladium is up 3.4% this month after adding 5.8% in July and dropping 11% in June. It retreated 25% in the first half of 2026 after rising 74% last year. The DG spot price is up $8.80 an ounce to $1344.00.
Spot platinum decreased 1.3% Tuesday to $1,854.60 an ounce and has declined 1.8% in the first two days of the week. Platinum is up 12% this month after gaining 6.6% in July and tumbling 19% in June. Platinum slid 23% in the first half of 2026 after increasing 122% in 2025. The current DG spot price is up $3.50 an ounce to $1859.00.
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