The headline inflation rate climbed 4.2% over the past 12 months, marking a notable increase from the 3.8% recorded in April. Despite higher energy costs permeating the broader economy, the data provided a temporary floor for gold prices, which had struggled after sliding below their 200-day moving average last week.
Gold Prices Stabilize as U.S. Inflation Meets Market Projections
Investors breathed a sigh of relief on Wednesday as the U.S. Bureau of Labor Statistics reported a 0.5% rise in the Consumer Price Index for May. The figures aligned closely with economist expectations, preventing the market turmoil that many traders had braced for following recent inflationary pressures.
Core CPI, which excludes volatile food and energy sectors, rose by a modest 0.2% last month—slightly cooler than the 0.3% anticipated by analysts. While this annual core inflation rate of 2.9% remains well above the Federal Reserve's 2% target, the absence of a surprise spike allowed for a minor recovery in precious metals. Markets continue to price in potential rate hikes by year-end, leaving gold in a precarious position despite this week's stabilization.
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