Wednesday turned out to be quite a positive day for gold. After the publication of US inflation data, it started a long-awaited upward movement.

Yesterday, gold futures for June jumped by 0.7%, or $12.70 to $1,853.70.

Gold logged the largest intraday increase in more than a week. The day before, its price sank to a 3-month low.

Silver showed the same dynamic yesterday. It climbed by 0.7% to $21,575.

The main driver for a buoyant rise was the release of US inflation data for April. The figure was higher than economists hadexpected.

Last month, annual inflation slowed to 8.3% compared to the March figure of 8.5%. The CPI index did not grow higher for the first time in 5 months.

At first glance, the report seems positive. However, inflation figures in April exceeded the forecast. Analysts had forecast a reading of 8.1%.

In addition, the core CPI index, excluding food and energy, soared by 0.6% compared with an increase of 0.3% in March.

The report showed that the cost of living in the US is still very high. Apparently, inflationary pressure will persist for quite a long time. Despite the shift to a hawkish stance, the Fed is too cautious.

After yesterday's publication of inflation data, many analysts voiced a similar opinion that Fed Charmian Jerome Powell jumped to the conclusions last week. He ruled out the possibility of raising rates by 75 basis points at the next FOMC meetings.

Now, market participants expect the Fed to hike the key rate by 50 basis points in June and July. However, will these measures beenough to tame inflation?

Analysts believe that the Fed is facing the consequences of a slow response to soaring inflation. Some Fed officials also shared this point of view.

James Bullard, the president of the Fed of St. Louis, mentioned a more stable price growth than economists had projected.

FOMC member Loretta Mister reckons that the possibility of a more aggressive 75 basis point rate hike looks likely throughout the year.

Nevertheless, the Fed is now reframing from a tougher monetary policy tightening. Its cautious approach against the backdrop of record inflation hinders a rally in the bond market. This morning, the indicator fell by 1.4 to an almost 2-week low of 2.92%.

A further decline in government bond yields may push gold to new highs.