- Gold price bounces from daily lows of $2,356, now at $2,385.
- Fed's preferred inflation gauge shows mixed results, edging closer to the 2% target.
- US Treasury yields slump as bonds rally, signaling potential for multiple Fed rate cuts this year.
Gold price makes a U-turn after diving to two-week lows of $2,353 edges higher some 0.80% as market participants seem secure the Federal Reserve will lower interest rates at the September meeting, following a soft inflation report. The XAU/USD trades at $2,385 after bouncing off daily lows of $2,356.
The US Bureau of Economic Analysis (BEA) revealed that the Fed’s favorite inflation gauge, the Personal Consumption Expenditure Price Index (PCE), ticked a tenth higher monthly than May’s data. It dipped as foreseen in the twelve months to June, though it’s at the brisk of hitting the Fed’s 2% goal.
June’s Core PCE edged up a tenth every month, while year-over-year (YoY) was unchanged, above projections.
Following the data, US bonds rallied, and consequently, US Treasury yields slumped, with the 10-year note sliding four and a half basis points to 4.202%.
Sources cited by Reuters noted, “Today's mixed-to-weaker U.S. data suggests inflationary pressures and economic activity are waning, paving the way for the Fed to cut rates twice this year.”
