Gold futures experienced extreme volatility Friday following the August Consumer Price Index (CPI) report. Core CPI rose 0.3% for the month. This reading exceeded the 0.2% forecast. Prices initially dropped to $4,300 as the data strengthened expectations for a Federal Reserve interest rate hike.
Gold later mounted a strong reversal to trade up by more than 1.5%. A pullback in U.S. Treasury yields and oil prices from daily highs supported the rebound. Headline inflation met expectations at 3.4% annually. The core data strength triggered significant two-way price action as traders assessed Fed policy.