Gold surged higher after the release of US inflation data on Wednesday night. It jumped about one percent to trade at $2,340 as the CPI hinted at an early Fed rate cut.
Faster-than-expected policy easing will provide a positive impetus for gold to soar higher.
Meanwhile, the price of gold is now at $2,311 which is a decrease of 0.58% since it opened in the Asian trading session this morning.
Market indicators showing both headlines in the Consumer Price Index (CPI) eased in May. These data give an impression for the Federal Reserve (Fed) to reduce its interest rate earlier.
US headline inflation was flat on a monthly basis and gave a positive move to 3.3% on an annual basis. It was 0.1% lower than the previous 3.4% and beat market forecasts which expected it to remain unchanged.
The data will increase the chances of the Fed moving its policy easing in September and the probability of its interest rate cut by September increased to almost 70% compared to the previous 53% by the market.
Looking ahead to the FOMC minutes, although the Fed has indicated that it is not ready to change interest rates, investors are expecting a change in the Summary Projections (SEP) report based on a graphic representation of how Fed members view interest rates going forward.
