2023-11-14 22:24:35
gold futuresThe U.S. dollar jumped on Tuesday (14th), the largest gain in nearly a month, as the U.S. reported that inflation cooled in October, deepening investors’ bets that the Federal Reserve (Fed) has completed raising interest rates. Both the U.S. dollar and U.S. bond yields fell and pushed up gold prices.
New York for December deliverygold futuresIt closed up $16.30, or 0.8%, at $1,966.50 an ounce, the largest gain since October 18.
goldSpot prices rose 0.6% to $1,957.70 an ounce.
The annual growth rate of the US Consumer Price Index (CPI) in October dropped to 3.2% from 3.7% in the previous month. The core CPI also slowed down, with the annual growth rate falling to 4% from 4.1% in the previous month.
According to the CME Group’s FedWatch tool, the market is now betting on a 100% chance that the Fed will hold steady in December, up from 86% before the inflation report was released.
Daniel Ghali, commodity strategist at TD Securities, said: “CPI data was much weaker than expected, providing support for precious metals prices. We expect the fourth-quarter data to be significantly worse, which will suppress the dollar and boost gold prices.”
Ghali predicts that within the next six months, gold prices may rise to US$2,100 per ounce.
After the inflation rate is announced,dollar indexfell 1.4% to 104.17,10-year U.S. Treasury yieldIt also fell from 4.631% to 4.463%, hitting a more than one-month low.
A weaker dollar typically reduces the value of holdings in dollarsgoldOpportunity costs relative to other hedging instruments will increase as yields declinegoldThe attractiveness of investing in government bonds.
Adrien Ash, director of research at Bullion Vault, predicted the Fed’s next step, believing that a rate cut is only a matter of time, which will also help the European Central Bank (ECB) and the Bank of England (BOE) cut interest rates.
However, Adam Koos, president of Libertas Wealth Management Group, warned that when the Fed takes back the microphone and hints that it will raise interest rates in the future, even if the economic data is beneficial to gold prices, it is still likely to see the rising momentum of gold prices interrupted and lower.
Investors will focus on the producer price index (PPI) for October released on Wednesday.
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