Top Stories This Week: Gold Makes Moves, Will it Back a New BRICS Currency?

The gold price trended up this week after about two months of downward momentum.

The yellow metal kicked into gear on Wednesday (July 12), rising to just below US$1,960 per ounce after the latest consumer price index (CPI) data showed that inflation cooled down last month. CPI was up 3 percent year-on-year in June, while core CPI, which excludes food and energy, was up 4.8 percent. Both increases are the smallest seen since 2021.

The US Federal Reserve has been aggressively raising interest rates in a bid to tame inflation, and the new CPI numbers are bolstering the idea that the central bank may be coming to the end of its hiking cycle. Chair Jerome Powell has previously indicated that two more boosts are likely before the end of the year, probably of 25 basis points each.

Gold typically fares better when interest rates are low and comes under pressure when they are higher, although the relationship is not exact. After Wednesday's initial rise, it spent some time above US$1,960 later in the week before closing around US$1,955.

The Fed's next meeting is approaching quickly, and will run from July 25 to 26.

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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.

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