Gold prices skyrocketed on Wednesday, gaining more than 1.3%.
Gold prices skyrocketed on Wednesday, gaining more than 1.3%.
The rally was fueled by U.S. dollar weakness and sinking U.S. Treasury yields following softer-than-expected U.S. inflation numbers.
The rally was fueled by U.S. dollar weakness and sinking U.S. Treasury yields following softer-than-expected U.S. inflation numbers.
Annual headline CPI came in at 3.0% in June, one-tenth of a percent below consensus estimates and a big step down from the 4.0% rate recorded in May.
Annual headline CPI came in at 3.0% in June, one-tenth of a percent below consensus estimates and a big step down from the 4.0% rate recorded in May.
The core gauge also surprised to the downside, clocking in at 4.8% versus a forecast of 5.0%.
The core gauge also surprised to the downside, clocking in at 4.8% versus a forecast of 5.0%.
The market's reassessment of the Fed's path triggered a massive sell-off in the U.S. dollar, sending the DXY index towards its weakest point in nearly 25 months.
Against this backdrop, EUR/USD soared more than 1.10%, breaking above the 1.1100 barrier and reaching its strongest mark since March 2022.
Against this backdrop, EUR/USD soared more than 1.10%, breaking above the 1.1100 barrier and reaching its strongest mark since March 2022.
The sharp gains in gold and the euro came as a surprise to many analysts, who had been expecting the Fed to continue raising interest rates aggressively in an effort to combat inflation.
The sharp gains in gold and the euro came as a surprise to many analysts, who had been expecting the Fed to continue raising interest rates aggressively in an effort to combat inflation.
If the Fed does indeed slow down its rate-hiking cycle, it could be a boon for gold and other precious metals, which tend to do well in periods of low inflation and interest rates.
If the Fed does indeed slow down its rate-hiking cycle, it could be a boon for gold and other precious metals, which tend to do well in periods of low inflation and interest rates.
GBP/USD also managed to stage a solid rally, coming within striking distance from capturing the elusive 1.3000 handle.
GBP/USD also managed to stage a solid rally, coming within striking distance from capturing the elusive 1.3000 handle.
If the Fed does indeed slow down its rate-hiking cycle, it could be a boon for gold and other precious metals, which tend to do well in periods of low inflation and interest rates.
If the Fed does indeed slow down its rate-hiking cycle, it could be a boon for gold and other precious metals, which tend to do well in periods of low inflation and interest rates.