Gold futures climbed to $4,112 on Tuesday, marking a significant rebound for the precious metal as softer-than-expected US inflation data eased investor concerns about further Federal Reserve rate hikes.
Silver also rallied, reaching $60, as the dual catalyst of cooling consumer prices and declining crude oil costs bolstered sentiment for safe-haven assets.
5%, the immediate pressure on the Fed to implement additional tightening has diminished, reducing the opportunity cost of holding non-yielding assets like gold.
The move represents a continuation of the recovery rally that began earlier in the week, offering a reprieve for metals that had recently posted their worst quarterly performance in years.
The price action reflects a shift in market positioning as traders digest the latest macroeconomic signals.
With the Consumer Price Index falling to 3.5%, the immediate pressure on the Fed to implement additional tightening has diminished, reducing the opportunity cost of holding non-yielding assets like gold.
This dynamic was reinforced by a sharp decline in crude oil prices, which further supported the risk-off rotation into precious metals.