Gold is down by 2%

Gold traded near $4,700 an ounce on Wednesday, facing downward pressure after stronger-than-expected US inflation figures reduced expectations for Federal Reserve rate cuts. US consumer inflation accelerated to 3.8% in April, above market forecasts of 3.7% and the highest reading since May 2023, as escalating energy costs tied to the Middle East conflict pushed prices higher. Investors now expect the Fed to keep interest rates unchanged for the remainder of the year, while markets have begun pricing in the possibility of a rate increase in April next year. President Donald Trump also introduced fresh measures aimed at easing consumer costs, focusing on beef and gasoline prices as his administration faces mounting political pressure ahead of the November midterm elections. Meanwhile, oil prices rallied over the past three sessions as ongoing diplomatic efforts to resolve the US-Iran war continued to stall, keeping concerns over inflation and energy markets firmly in focus.

Gold decreased 2% to 4640.97 USD/t.oz

Gold fell below $4,690 an ounce on Tuesday amid heightened Middle East uncertainty and the prolonged shutdown of the Strait of Hormuz, which pushed oil prices higher and kept inflation risks in focus. A rebounding dollar also weighed on bullion. US President Donald Trump stated that the US-Iran ceasefire was on "massive life support" after rejecting Tehran’s latest peace proposal, raising concerns that the critical shipping route could remain blocked for an extended period. Reports indicate Trump is set to meet with his national security team to discuss a potential restart of military operations and revisit plans to escort commercial ships through the Strait. Meanwhile, US inflation accelerated to 3.8% in April, the highest since May 2023 and above forecasts of 3.7%, while the core rate also exceeded expectations at 2.8%. The data complicates the Federal Reserve’s outlook, with traders now pricing in over a 70% chance of a rate hike by April 2027 and ruling out cuts through year-end.