Gold Prices Fluctuate as US Inflation Data Impacts Rate Cut Expectations

As of August 15, 2025, the gold market has experienced some volatility, with spot gold trading at $3,339 per ounce, up 0.1% from the previous day. However, gold futures for December delivery have held steady at $3,384 an ounce. For the week, bullion has slipped 1.8% per ounce.

The recent movement in gold prices has been influenced by the release of stronger-than-expected US inflation data. The US producer price index (PPI) for July rose 3.3% year-on-year, exceeding the forecast of 2.5%, while weekly jobless claims came in lower than expected. This hotter-than-anticipated wholesale price data has raised concerns that the Federal Reserve may opt for a smaller rate cut next month, rather than the more aggressive 50-basis-point reduction that was previously anticipated.

Analysts suggest that if the wholesale price gains feed into consumer prices, the expectations for rate cuts could be scaled back, potentially affecting gold's appeal as an investment. The precious metal is still grappling with the aftermath of the PPI jump, which has raised questions about the extent to which the Fed may be willing to reduce rates this year.

Geopolitical factors and currency movements have also been in focus for the gold market. Investors are closely watching the upcoming US-Russia meeting on August 15 for any progress in the Ukraine peace talks, though the chances of a breakthrough remain uncertain. Additionally, gold's safe-haven demand has been supported by the ongoing geopolitical uncertainties and currency weakness, which analysts expect will continue to influence short-term price action, along with upcoming US economic data and central bank commentary.