World gold price on the morning of August 15, 2025: Gold price decreased after the July PPI report

Consumers hoping for a slowdown in inflation this year have been hit with a harsh reality as producer prices have risen sharply. A spike in the US producer price index (PPI) has also caused volatility in the gold market, as high inflation could make it harder for the Federal Reserve to cut interest rates sharply in the second half of the year.

The US Department of Labor said the PPI rose 0.9% in July, after remaining flat in June. This was much higher than the forecast of a 0.2% increase. Compared to the same period last year, the PPI increased 3.3%, the highest increase since February 2025.

Inflation is spreading beyond consumer prices to the manufacturing economy. The core PPI (excluding food and energy) rose 0.9% in July, after remaining unchanged in June. Over the past 12 months, the core PPI has risen 2.8%.

The main reason for the July price increase was a 1.1% increase in service costs, accounting for more than 75% of the overall increase.

Impact on world gold prices

Immediately after the inflation data was released, the world gold price decreased slightly. Spot gold is currently at 3340.96 USD/ounce, down 0.69% on the day.

Converted according to the USD exchange rate at Vietcombank (26,440 VND/USD), the world gold price is about 106.66 million VND/tael (excluding taxes and fees). Thus, the price of SJC gold bars is 18.04 million VND/tael higher than the international gold price.

High inflation is generally bad for gold prices because it increases the opportunity cost of holding the metal. However, many experts say the impact is not entirely negative, as persistent inflation also threatens economic growth.

Mohammed Taha, market analyst at MH Markets, said: "This data shows that inflationary pressures remain, which could lead to a decline in gold prices as investors worry that interest rates will remain high for longer. However, if the Fed is forced to ease policy due to economic weakness or persistent inflation, gold prices could recover and head towards $3,450-$3,500."

Some analysts predict the US economy could fall into a state of “stagflation” – high inflation but slow growth. In this case, gold would become an attractive asset because the Fed would be forced to cut interest rates, pushing real yields down.

Despite higher-than-expected inflation, the market still expects the Fed to cut interest rates next month, which could support gold prices in the medium term, especially if the economy shows clear signs of weakness.