Gold price falls after unexpectedly strong US producer price data – Commerzbank

FXStreet Insights Team FXStreet

The Gold price came under pressure yesterday following the publication of US producer prices. These rose significantly more than expected in July, which is likely to be attributable to the impact of tariffs. The consumer price data published two days earlier had not yet shown any noticeable increase in price pressure, Commerzbank's commodity analyst Carsten Fritsch notes.

Putin and Trump meeting can influence demand for Gold as a safe haven

"The latest speculation about a 50 basis point interest rate cut by the Fed at its next meeting in September was dampened by yesterday's data. According to Fed Fund Futures, slightly less than 25 basis points are currently priced in again. The Gold price subsequently fell by around $30 to $3,330 per troy ounce. The silver price also came under pressure as a result, slipping below the $38 per troy ounce mark. However, the price had risen significantly beforehand, reaching $38.7 yesterday morning, its highest level since the end of July."

"Meanwhile, the Gold market is still waiting for official confirmation from the US government that Gold imports into the US will remain tariff-free. So far, there has only been a post from President Trump on his social media platform. Even though it is highly unlikely that Trump will make a U-turn, a certain degree of uncertainty remains. This explains the continuing premium of around USD 50 on Comex Gold futures over the international Gold price."

"Today, the Gold market is also eagerly awaiting the summit meeting between US President Trump and Russian President Putin this evening. The outcome of the summit could influence demand for Gold as a safe haven. This could therefore result in price fluctuations when trading opens on Monday."

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FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

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