Gold price notches new record on inflation data boost

[Ben Graham]

Gold edged higher on Tuesday for another record as markets firmed up bets on US interest rate cuts after the release of new inflation data.

Spot gold traded 0.3% higher to hit a new peak of $4,633.86 per ounce, taking its gains this year to 6%, while US gold futures steadied at $4,612.10 per ounce. On Monday, it broke through the $4,600-an-ounce milestone for the first time. That rally was ignited by uncertainty surrounding the US Federal Reserve amid renewed threats by the Trump administration.

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The release of CPI data on Tuesday gave the metal a further boost, as the inflation figures fell short of analyst expectations, raising the chances of the Fed continuing to cut interest rates this year. Lower rates tend to be favorable for non-yielding assets like gold.

“The reason for the slightly positive tone across the board in the markets was the benign CPI data (which) portends a higher likelihood of Fed rate cuts in the future,” David Meger, director of metals trading at High Ridge Futures, told Reuters.

Fed uncertainty

Fundamental factors questions over Fed independence continue to support safe-haven gold, Meger added, in reference to President Donald Trump’s aggressive calls for lower rates and a US Department of Justice probe into Fed Chair Jerome Powell.

“With Powell’s tenure as Fed Chair due to end in May, uncertainty of Fed independence and the trajectory of US interest rates will in our view remain a key gold market driver for much of 2026,” David Wilson, director of commodities strategy at BNP Paribas SA, wrote in a note to Bloomberg.

Attacks on the Fed helped propel gold to successive record highs in 2025, ending the year with a gain of nearly 70%. Also elevating bullion were heightened geopolitical risks and central bank buying.

With these tailwinds remaining intact, major banks have upped their bullish calls on gold this year. This week, Citigroup published its forecast, predicting that gold will reach $5,000 an ounce in the next three months.

“We expect the bull market to stay intact in the near term,” Citi analysts said in a note. “Our base case is for eventually moderating geopolitical risks to weigh on hedging demand for precious metals later in the year, particularly on gold.”

(With files from Bloomberg and Reuters)