Gold Weakens After US Core CPI Dampens Dovish Fed Expectations
Gold prices weakened again after the release of US core inflation data, or Core CPI, in line with market expectations. Although at first glance the figures appeared relatively benign, market participants assessed that the data was not weak enough to significantly alter Federal Reserve policy expectations. As a result, gold lost some of its appeal as the market did not see the possibility of more aggressive interest rate cuts in the near future.
In February 2026, US Core CPI was recorded at 2.5% annually and 0.2% monthly. Meanwhile, headline CPI was at 2.4% annually and 0.3% monthly. This data shows that core inflationary pressures have not increased sharply, but they are also not low enough to provide confidence that inflation has truly reached the central bank's target.
For the gold market, the negative reaction emerged because investor focus was not solely on the inflation figures themselves, but also on their impact on the US dollar and Treasury bond yields. When the market believes the Fed still needs to be cautious, bond yields tend to remain high and the dollar remains strong. This combination puts pressure on gold, as the precious metal offers no yield, making it less attractive when interest-bearing assets offer better returns.
On the other hand, the market is also still monitoring inflation risks from rising energy prices amid geopolitical tensions. Concerns that surging oil prices could re-inflate inflationary pressures limit gold's upside, although this safe-haven asset remains supported by global uncertainty. Currently, gold's direction remains largely determined by dollar movements, yields, and changes in market expectations regarding the Fed's future interest rate policy.(Cp)
Source: Newsmaker.id
