Now Reading: Gold hits two-month high above $4,400 as US CPI cools rate hike fears
-
01
Gold hits two-month high above $4,400 as US CPI cools rate hike fears
Gold hits two-month high above $4,400 as US CPI cools rate hike fears
Gold rose to a two-month high above $4,400 an ounce after July US CPI inflation came in at 0.1%, matching estimates and convincing traders the Fed will keep rates on hold in…
The Story in Brief
Gold rose to a two-month high above $4,400 an ounce after July US CPI inflation came in at 0.1%, matching estimates and convincing traders the Fed will keep rates on hold in September. Spot gold hit $4,406.64, up 0.9% on Wednesday, before easing to $4,410. The chance of a September rate hike dropped to 40% from 46% before the data, according to the CME FedWatch tool.
The rally is supported by renewed investor buying. Global gold ETF holdings added 22 tonnes in early August, while China's central bank extended its buying streak to 21 months. Analysts say the breakout above the 100-day moving average shows gold is breaking out of its downtrend since March. Silver is outperforming gold, up 13% in August, but profit-taking risks are rising. Attention now shifts to Thursday's US producer price index (PPI).
The Indian Opinion
The usual chorus attributing every gold move to war and oil, or to some grand dollar conspiracy, misses the real driver: real interest rate expectations shifting by fractions in a single data point. The CPI came in exactly as estimated, yet that one number moved September rate hike odds from 46% to 40%. A single hotter print on Thursday's PPI could reverse the entire rally. The question for gold bulls: does this break above $4,400 attract sustained ETF buying, or was it just a technical pop by dip-buyers?
Sources (3): livemint.com, timesofindia.indiatimes.com, livemint.com (2)
This story was synthesised by AI from the 3 sources linked above.
Updated: this story now draws on 3 sources.
