U.S. CPI Rises 0.5% in May as Expected; Gold Trades at $4,164.43, Down 2% on Day

According to U.S. Bureau of Labor Statistics, the Consumer Price Index rose 0.5% in May, meeting economist expectations, with headline inflation at 4.2% over the past 12 months, up from 3.8% in April. Core CPI, which excludes volatile food and energy prices, rose 0.2% last month, slightly cooler than the anticipated 0.3% increase.

Gold prices fell roughly 2% to trade at $4,164.43 an ounce on the relief rally following the data release on Wednesday. The energy index rose 3.9% in May, driven by supply disruptions related to the Iran conflict, accounting for over 60% of the monthly all-items increase. Analysts noted that while inflation remains above the Federal Reserve's 2% target, the softer-than-expected core reading suggests underlying inflation pressure is cooling.