Effect on Fed rate hike expectations

• September hike odds collapsed: After the CPI release, fed funds futures priced only a 40% probability of a rate hike at the Fed's September meeting, down sharply from 55% a week earlier . Markets now see a 56% chance of a hike by October .
• Fed gets breathing room: The data reinforced expectations that the Fed will hold rates steady in September . Richmond Fed President Tom Barkin said it remains an "open question" whether a rate hike will be needed at all .
• Still not out of the woods: Core CPI slowed to 2.5% annually, but analysts note the Fed's preferred underlying inflation measure remains above 3%, so the possibility of a later hike is not off the table .

Precious metals outlook

Key cautions: Analysts warn that a period of consolidation is likely after such strong price increases in late 2025 and early 2026 . Heraeus Precious Metals expects prices to trend lower for at least the first part of 2026 before recovering .

Geopolitical factors supporting bullion

• US-Iran conflict / Strait of Hormuz tensions: The ongoing US-Iran standoff and negotiations over reopening the Strait of Hormuz have been a major driver. This conflict pushed gold to a record above $5,100/oz in January 2026 . The World Gold Council cited elevated geopolitical risk from the US-Iran conflict as the single largest contributor to gold's first-half performance .
• Broader global uncertainty: Analysts consistently point to "elevated geopolitical and economic uncertainty" as a key support, alongside strong central bank buying and retail investor demand .
• Central bank purchases: Central banks remain structural buyers of gold, diversifying reserves away from the dollar, which adds a persistent bid to prices .
• Safe-haven demand: Escalating tensions in the Middle East and other global flashpoints continue to drive safe-haven flows into gold, silver, and platinum .

Effect on Fed rate hike expectations

• September hike odds collapsed: After the CPI release, fed funds futures priced only a 40% probability of a rate hike at the Fed's September meeting, down sharply from 55% a week earlier . Markets now see a 56% chance of a hike by October .
• Fed gets breathing room: The data reinforced expectations that the Fed will hold rates steady in September . Richmond Fed President Tom Barkin said it remains an "open question" whether a rate hike will be needed at all .
• Still not out of the woods: Core CPI slowed to 2.5% annually, but analysts note the Fed's preferred underlying inflation measure remains above 3%, so the possibility of a later hike is not off the table .

Precious metals outlook

Key cautions: Analysts warn that a period of consolidation is likely after such strong price increases in late 2025 and early 2026 . Heraeus Precious Metals expects prices to trend lower for at least the first part of 2026 before recovering .

Geopolitical factors supporting bullion

• US-Iran conflict / Strait of Hormuz tensions: The ongoing US-Iran standoff and negotiations over reopening the Strait of Hormuz have been a major driver. This conflict pushed gold to a record above $5,100/oz in January 2026 . The World Gold Council cited elevated geopolitical risk from the US-Iran conflict as the single largest contributor to gold's first-half performance .
• Broader global uncertainty: Analysts consistently point to "elevated geopolitical and economic uncertainty" as a key support, alongside strong central bank buying and retail investor demand .
• Central bank purchases: Central banks remain structural buyers of gold, diversifying reserves away from the dollar, which adds a persistent bid to prices .
• Safe-haven demand: Escalating tensions in the Middle East and other global flashpoints continue to drive safe-haven flows into gold, silver, and platinum .