15 July Gold Prices Fell: Inflation and Fed Expectations Steer the Markets

While gold prices tended to fall on Wednesday, 15 July, the focus of the markets was on US inflation data and the Federal Reserve's (Fed) potential interest rate steps. The US inflation, which came in below expectations, significantly changed the estimates regarding the central bank's monetary policies. Despite this, global ounce gold managed to maintain its strong trend above the 4 thousand dollars level.

Domestically, the direction of gram gold continues to depend on the fluctuations in the US dollar/Turkish Lira exchange rate. In addition to global developments, every movement in the exchange rate plays a directly decisive role on gold prices in the domestic market. The escalating tension between the US and Iran, particularly in the Middle East, also affects asset prices in international markets.

The rise in oil prices, driven up by regional tensions, has increased global inflation pressures, narrowing the maneuvering space of central banks. In light of these developments, market expectations are taking shape; it is almost certain that the Fed will make at least one interest rate hike by the end of the year. The possibility of an additional rate hike, if conditions force it, is also gaining strength in pricing models.