Gold prices decline in anticipation of upcoming US inflation report
Gold prices fell to $4,300 per ounce on Tuesday, retreating to levels not seen since December 2025, as market participants turned their attention to the highly anticipated US inflation report scheduled for release on Wednesday. Analysts expect the inflation rate for May to have risen to 4.2%, marking its highest point in nearly three years, largely driven by a sharp increase in energy costs.
This expected uptick in inflation follows last week’s robust US jobs report, which revealed that the economy added 172,000 jobs in May—significantly surpassing market forecasts. The stronger-than-expected employment data has intensified investor speculation that the Federal Reserve will continue to raise interest rates throughout the year. Currently, traders are pricing in approximately a 70% probability of a rate hike occurring in December, reflecting growing concerns about inflationary pressures.
Meanwhile, geopolitical developments in the Middle East provided a momentary easing of market tensions. Iran and Israel announced a cessation of attacks against each other following an appeal from US President Donald Trump, signaling a potential diplomatic breakthrough. This announcement contributed to a decline in oil prices, offering some relief to inflation worries. However, despite this positive development, uncertainty remains high, and markets continue to closely monitor both economic indicators and geopolitical risks that could influence inflation and commodity prices in the near term.
