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Gold prices surging higher to test resistance at $4,100 following sharp drop in U.S. inflation

Gold prices surging higher to test resistance at $4,100 following sharp drop in U.S. inflation

KitcoKitco2026/07/14 12:48
By:Kitco

(Kitco News) - The gold market has been thrown a critical lifeline with prices jumping back toward $4,100 an ounce following a sharp drop in inflation pressures, which should give the Federal Reserve room to leave interest rates unchanged through the second half of the year.

The Consumer Price Index (CPI) fell 0.4% in June, following a 0.5% increase in May, the U.S. Bureau of Labor Statistics announced Tuesday. The inflation data came in cooler than expected, as economists had forecast a decline of 0.1%.

“This decline in the all-items index was the largest 1-month decrease since April 2020 when it fell 0.8%,” the report said.

Over the past 12 months, headline inflation increased 3.5%, down sharply from the previous month's reading of 4.2%. Annual inflation also came in weaker than expected, as economists had forecast an increase of 3.8%.

Meanwhile, core CPI, which strips out volatile food and energy prices, was unchanged last month after rising 0.2% in May. According to consensus estimates, economists had forecast another 0.2% increase.

Over the past 12 months, annual core inflation rose 2.6%, down from 2.9% reported in May.

The gold market saw a nearly $60 jump in its initial reaction to the inflation data. However, the precious metal still has some work to do, as prices remain below $4,100 an ounce. Spot gold last traded at $4,087.40 an ounce, up more than 2% on the day.

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