The latest figures show the U.S. CPI at 3.4% and PPI at 4.7%, both hitting or falling below market estimates. This cooling economic data triggered a 20-basis-point drop in the 2-year Treasury yield, slashing the implied probability of a September rate hike from 80% to 35%. Consequently, spot gold climbed 1.11% to $4,425.20, maintaining momentum from last week's rally.
Gold and Silver Prices Rally as US Economic Data Eases Rate Hike Fears
Weak U.S. inflation data and falling Treasury yields are providing a tailwind for precious metals, even as geopolitical uncertainty persists regarding an Iran deal. While the market navigates a stalled situation in the Strait of Hormuz, investors are increasingly betting against an aggressive interest rate hike from the Federal Reserve.
Mining output remains a critical pillar for the sector. Barrick Gold reported attributable production of 796,000 ounces, exceeding its quarterly guidance range of 730,000 to 770,000 ounces. Meanwhile, the silver market is showing signs of life as Pan American Silver posted a robust 6.47 million ounces for the second quarter, a 27% increase year-on-year. Perth Mint silver bar and coin sales also rebounded significantly in July, jumping 65% from June lows to reach 486,000 ounces. Spot silver mirrored this strength, reclaiming the $66 per ounce level to trade at $66.389 for a 2.63% daily gain.
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