🕒 Created

Gold Prices Slide as Stubborn Inflation Outweighs Slower Economic Growth in Latest GDP Report

Gold prices fell approximately 1.3% following the release of the second estimate for Q2 2026 GDP growth, which stood at 1.5% annualized. While slower growth typically supports gold, the market reacted negatively due to persistent inflation. The Personal Consumption Expenditures (PCE) price index, the Federal Reserve's preferred inflation gauge, rose 3.7% year overover-year, exceeding the 3.6% expected by economists. This combination of slowing growth and high inflation creates a complex environment for the Federal Reserve, as it limits the room for immediate interest rate cuts. Higher inflation expectations have bolstered the U.S. dollar and increased Treasury yields, both of which act as headwinds for gold. Investors are currently prioritizing the inflation signal over the headline GDP figure. The next major catalyst for the market will be the Federal Reserve officials' remarks at Jackson Hole this Friday, where they will weigh the balance between persistent inflation and economic momentum.

Sources