The Bureau of Labor Statistics reported that US headline CPI rose 2.4% year-over-year in August 2025, down from 2.7% in July and marking the lowest annual inflation rate since February 2021. The softer-than-expected print initially caused a brief $25 dip in gold prices but the yellow metal quickly reversed course.
The recovery in gold was driven by the bond market reaction. The 10-year Treasury yield fell 9 basis points to 3.78%, dragging real yields to a 3-month low of 1.45%. The decline in real yields provided a powerful bullish catalyst. Digging deeper, shelter costs remain the stickiest component, but goods deflation accelerated with core goods prices falling 0.4% MoM.
COMEX gold trading volume spiked to 425,000 contracts, 55% above average. SPDR Gold Trust (GLD) saw net inflows of 4.8 tonnes on the session as investors positioned for continued monetary easing.
