Economists at TD Securities analyze Gold price outlook ahead of the US Consumer Price Index (CPI) report.

Fed's bark could be as bad as its bite

Gold prices are finding a footing with CPI on the radar for on Wednesday, and on that note, we are expecting a below consensus CPI print, which could help the yellow metal find further support. However, given the accumulation of broadly firmer-than-expected activity over the past few weeks and the Fed's clear inclination to hike again, we are now looking for a final 25 bps rate increase in the Fed funds at the July FOMC meeting, which suggests the precious metal is not quite ready to take off just yet. 

With fears rising that the Fed's bark could be as bad as its bite, the yellow metal is likely to remain under pressure for the time being.

See – US CPI Banks Preview: Inflation to step meaningfully lower in June