The decline in precious metals came as investors shifted towards riskier assets following softer US inflation data. Asian equity markets advanced on Wednesday (July15), with South Korea’s KOSPI jumping sharply and broader regional indices trading higher, reflecting improved investor sentiment.
The trigger was the latest US Consumer Price Index (CPI) report, which showed headline inflation fell 0.4% in June, marking its first monthly decline since the pandemic. Core inflation also came in below market expectations at 2.6%, reinforcing hopes that the Federal Reserve may keep interest rates unchanged at its July meeting.
Following the data, markets sharply pared expectations of a July rate hike, with the implied probability falling to around 16%. US Treasury yields also retreated, while the US dollar weakened against most major currencies.Gold typically benefits during periods of economic uncertainty and lower interest rates. However, in the immediate aftermath of the inflation data, improving risk sentiment encouraged investors to rotate into equities, weighing on demand for safe-haven assets despite the softer dollar.
Meanwhile, oil prices paused after their recent rally, with Brent crude holding around $85.50 a barrel after gaining more than 12% this week amid heightened Middle East tensions. The easing in crude prices also reduced some inflation concerns, further supporting broader market optimism.
Investors will now watch upcoming US corporate earnings and key economic data, along with developments in the West Asia, for fresh cues that could influence the outlook for gold and silver prices.
-With Reuters inputs
