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Gold Rebounds as Dollar Pushes Lower After Softer US CPI Print

Yvonne Yue Li

Tue, May 13, 2025, 11:54 AM 2 min read

(Bloomberg) -- Gold advanced as the dollar pushed lower after the latest US inflation data offered support for bets on interest rate cuts this year.

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US inflation rose less than forecast in April amid tame prices for clothing and new cars, according to Bureau of Labor Statistics data. The CPI report suggests importers and retailers are absorbing some of the extra costs and imported products sold now had arrived before the tariffs were in effect.

While the trade truce reached between US and China over the weekend has scaled back projections of how much damage tariffs will inflict on the economy, several economists said the duties will still keep inflation well above the Federal Reserve’s 2% target.

Traders now see at least two rate reductions this year from the US central bank, with the first one likely in September. Lower rates are generally positive for bullion as it pays no interest.

Gold is up almost a quarter higher this year, although the easing of US-China tensions has given traders a clear indication President Donald Trump’s administration is taking a softer approach to trade with the world’s second-largest economy.

In the very short term, gold will trade in a consolidation mode due to the major deescalation in trade tensions between the world’s two largest economies, according to Ole Hansen, head of commodities strategy at Saxo Bank A/S. Hansen sees bullion’s key support area of $3,155 to $3,165 an ounce.

Spot gold climbed 0.5% to $3,254.65 an ounce at 12:35 p.m. in New York. The Bloomberg Dollar Spot Index fell 0.5%. Silver, platinum and palladium all advanced.

--With assistance from Sybilla Gross and Jack Ryan.