EUR/USD Slumps After Hot CPI — Gold Loses Shine Too

Dollar Strength Hurts Gold
When inflation data came in hot, traders quickly adjusted their bets: the Federal Reserve might keep rates high for longer, maybe well into 2026. That shift triggered a broad risk-off mood — stocks dipped, EUR/USD slid, and gold, which usually benefits from uncertainty, fell as yields and the dollar surged.
Spot gold dropped below key support levels near $2,350, marking one of its steepest single-day declines in weeks. The higher U.S. yields reduced gold’s appeal since it pays no interest, while the dollar’s strength made it more expensive for non-U.S. buyers.

• Hot CPI data: Fuels speculation that rate cuts will be delayed.
• Dollar rally: Pulls EUR/USD lower and puts pressure on gold.
• Bond yields rising: Increases the opportunity cost of holding gold.

What’s Next
Gold traders are now watching upcoming Fed speeches and jobless-claims data to gauge whether the inflation surprise will extend the hawkish tone. If yields stay elevated, gold could remain under pressure, but any sign of cooling inflation may quickly spark a rebound.
For now, the takeaway is clear — the CPI heat wave strengthened the dollar’s grip on global markets, dragging both EUR/USD and gold lower in a synchronized move that reminded everyone: when inflation bites, the Fed still holds the steering wheel.