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Despite weak U.S. inflation, gold prices surpass $1,950

13 Jul,2023
Despite weak U.S. inflation, gold prices surpass $1,950

On Thursday, gold prices remained close to the highest level in one month as speculations on a less aggressive Federal Reserve were stoked by U.S. inflation figures that were weaker-than-expected, while copper prices were boosted by the possibility of additional stimulus measures in major importer China.

Spot gold traded flat at $1,957.07 per ounce, while gold futures muted at $1,961.45 per ounce

The price of gold increased on Wednesday for the first time in more than two months, followed a drop in the dollar and Treasury yields following news that U.S. consumer price index (CPI) inflation surged less than anticipated in June.

The figures demonstrated that the Fed's aggressive interest rate increases during the previous year were paying off, and it suggested that the bank would moderate its hawkish stance sooner than expected.

The scenario suggests that the pressure on gold from rising interest rates, which had previously greatly affected the yellow metal over the previous year, will be lessened. The opportunity cost of owning non-yielding assets like gold is increased by high loan rates.

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