Gold prices dipped on Wednesday following robust U.S. inflation data, which reduced speculation regarding imminent interest rate cuts. Investors are also closely monitoring an upcoming meeting between U.S. President Donald Trump and Chinese President Xi Jinping.
At 0946 GMT, spot gold was down 0.4% to $4,694.59 per ounce, retreating from a three-week high reached in the previous session. In contrast, U.S. gold futures for June delivery increased by 0.3% to $4,702.40.
The U.S. dollar climbed to its highest level in over a week, rendering dollar-priced bullion more expensive for foreign currency holders. U.S. consumer inflation increased in April, with the annual rate recording its most significant rise in three years. This surge was attributed to higher oil prices spurred by the ongoing U.S.-Israeli conflict with Iran.
UBS analyst Giovanni Staunovo remarked, “Yesterday’s higher inflation data is expected to keep the Federal Reserve on hold longer, but still with an easing bias. That is likely to keep (gold) trending sideways in the short term.” He further asserted, “In general, U.S. economic data will influence gold; if we observe a slowdown in growth, that should support the yellow metal.”
Market participants are awaiting U.S. producer price inflation data for April, expected to be released later in the day. The conflict in the Middle East remains unresolved, with Trump stating he does not anticipate needing China’s assistance to end the war with Iran, ahead of his scheduled meeting with Xi.
Since the onset of the Iran conflict in late February, gold prices have plummeted by more than 10%, driven by persistent high oil prices that fuel inflation concerns and raise interest rates. While gold is often viewed as a hedge against inflation, elevated interest rates tend to negatively impact this non-yielding asset.
Traders have largely eliminated expectations for a U.S. rate cut this year and currently assign a 29% probability of a rate hike in December, according to CME Group’s FedWatch tool.
In precious metals, spot silver fell 0.1% to $86.61 per ounce after reaching its highest level since March 11. Platinum declined 0.1% to $2,123.80, while palladium was down 0.1% at $1,489.18.
Published on May 13, 2026.
