Although the annual rate of U.S. consumer price index (CPI) in August cooled from the previous month, it was still higher than market expectations, prompting investors to bet that the Federal Reserve (Fed) may raise interest rates more aggressively this month. interest rates soared andGold FuturesIt fell more than 1% on Tuesday (13th).
- New York for December deliveryGold FuturesPrices closed down $23.20, or 1.3 percent, at $1,717.40 an ounce.
Money Crashers chief executive Andrew Schrage said the dollar’s strong appreciation following the CPI report was the main drag on gold prices on Tuesday.
The US CPI in August increased by 8.3% year-on-year and 0.1% month-on-month, both higher than market estimates of 8.1% and -0.1%. Compared with July, the year-on-year growth rate slowed down, but the monthly growth rate expanded.
Excluding energy and food, the core CPI increased significantly, with the annual growth rate expanding from 5.9% in July to 6.3%, and the monthly growth rate expanding from 0.3% in July to 0.6%, both higher than market estimates of 6.1% and 0.3%.
After the release of the CPI report, the interest rate futures market now predicts that the probability of the Fed raising interest rates by 3 yards on September 21 is 81%.
“It’s worth watching next,” Schrage said.goldCan it regain its light as an inflation hedging tool? At this stage, traders seem convinced that inflation won’t get out of hand, provided the Fed will have to raise rates more aggressively, and possibly for a longer period of tightening, to rein in it. “
Schrage said the August CPI report was bearish for gold prices in the short term, but once once more reminded everyone of one thing: inflation is hard to predict and things can change at any time.
AlthoughgoldIs an inflation hedge, but raising interest rates will increase holdingsgoldopportunity cost, which in turn depresses its demand and price.
ICE tracking the US dollar once morest six major currencies US dollar index (DXY) rose 1 percent on Tuesday, with U.S. short-dated Treasury yields hitting a fresh 14-month high.
Other Metal Commodities Trading
- Delivered in DecemberSilver FuturesIt was down 37 cents, or 1.9 percent, at $19.491 an ounce, halting a six-day winning streak.
- Delivered in DecemberCopper futuresIt was down 5 cents, or 1.5 percent, at $3.5555 a pound.
- Delivered in OctoberPlatinum FuturesIt fell 2.3 percent to settle at $888.70 an ounce.
- Delivered in DecemberPalladium FuturesIt fell 7.2 percent to settle at $2,111.10 an ounce.