Gold prices remain firmly supported above $3,200 per ounce, as softer-than-expected inflation data released Tuesday opens the door for potential future rate cuts by the Federal Reserve.

According to the U.S. Bureau of Labor Statistics, the Consumer Price Index (CPI) rose 0.2% in April, following a 0.1% drop in March. This came in below economists’ forecasts of a 0.3% increase. On a year-over-year basis, CPI rose 2.3%, down from 2.4% in March — the smallest annual increase since February 2021.

Core CPI, which excludes food and energy, also increased by 0.2% last month, versus expectations of 0.3%. However, annual core inflation remained unchanged at 2.8%, suggesting that underlying price pressures are still present.

The inflation report was seen as mildly positive for gold, with spot prices climbing 0.25% to $3,244.90 per ounce following its release. Although gold remains within a narrow trading range, the softer inflation data encouraged renewed buying interest.

Shelter costs were the primary contributor to inflation, rising 0.3% in April and accounting for over half of the monthly increase. Meanwhile, falling energy prices helped offset some of the upward pressure, with the energy index down 3.7% for the month.

Beyond domestic data, the broader macroeconomic backdrop also played a role. Ongoing trade negotiations between the U.S. and China have reportedly yielded a 90-day pause on new tariffs, which helped ease concerns over supply disruptions and rising costs.

Still, the Fed is not expected to change course immediately. Uncertainty around growth and inflation remains high, and the central bank is likely to wait for clearer signals before adjusting policy at its June meeting.

In summary, while the inflation slowdown may not yet trigger direct Fed action, it strengthens gold’s appeal as a safe-haven asset. If inflation continues to cool and the economy weakens further, gold could gain new momentum in the coming weeks.