September 13th, unlike in the past, this week’s focus market came a little early. This evening, the U.S. consumer price index (CPI), which has attracted much attention from all walks of life, is about to be released in August.
During the day, gold dropped to 1720 again and rebounded, and the European and American disks continued to break high to challenge last week’s high of $1735. As of press time on Tuesday afternoon, gold was quoted at $1,727.1 an ounce.
At 8:30 on Tuesday, the U.S. Department of Labor will announce the latest August seasonally adjusted CPI annual rate, monthly rate, and core CPI annual rate.
It is reported that this will be the latest data from the Fed on current US inflation, so it will be a key factor in their decision to raise interest rates next week at the FOMC meeting.
Previously, the US inflation rate reached 9.1% in June and 8.5% in July. This time, the vast majority of analysts and economists expect inflationary pressures to continue to decline slightly in August.
Specifically, the market expects the U.S. headline inflation rate to rise by 8.1% year-on-year in August, falling for the second consecutive month.
For traders, the crucial U.S. CPI report will play a key role in influencing the outlook for Fed policy and determining the near-term direction of the dollar. This helps investors determine the next phase of gold’s move.
Traders are likely to avoid big bets ahead of key data, preferring to wait and see, with gold expected to consolidate further.
Analysts believe that if the inflation data in August weakened significantly, it may shake the expectations. While gold is seen as an inflation hedge, higher interest rates increase the cost of holding the non-yielding asset gold, while boosting U.S. bond yields and favoring the dollar.
However, judging from the intraday trend, the price of gold fluctuated and strengthened, and tonight’s data is expected not to deviate too much from expectations.
The market currently expects the Fed to raise interest rates by 75 basis points for the third consecutive time at the new policy meeting in late September, and may remain stable for a long time after the policy rate finally peaks.
Recent comments from Fed members, including the chairman, suggest the central bank is highly focused on bringing inflation down to acceptable levels. Fed Chairman Powell, Vice Chairman Brainard, Fed Governor Waller and others have been firmly convinced that they will “do whatever it takes” to reduce inflation.
On Friday, Fed Governor Waller also said he would support another 75 basis points of interest rate hikes.
The odds of the Fed raising rates by 75 basis points at next week’s FOMC meeting have risen to 92 percent, according to CME’s FedWatch tool.