Gold Futures Rise as U.S. Inflation Drops Sharply

Gold futures rose 1.5% to $4,065.40 an ounce on Tuesday, recovering from a previous session's decline. The rebound was driven by a report from the United States Department of Labor showing that June consumer prices fell by 0.4%, a significantly steeper drop than the 0.1% decrease economists had projected.

Annual consumer price growth slowed to 3.5%, while core consumer prices remained unchanged. Because both figures arrived below expectations, the data eased market concerns regarding high interest rates and contributed to a 0.3% decrease in the U.S. dollar index. This shift provided the Federal Reserve System with more flexibility regarding future interest rate decisions.

Despite the rebound, gold's upside remained limited by rising crude oil prices, which climbed more than 1%. This increase in oil costs was attributed to an ongoing conflict between the United States and Iran, exacerbated by the reimposition of a U.S. blockage.