Gold prices were little changed on Tuesday as investors await key US inflation data that could offer clues to the Fed’s decision to cut stimulus measures aimed at helping the recovery from the pandemic. Spot gold was down 0.1% at $1,792.31 an ounce at press time, while U.S. gold futures held steady at $1,793.60. Cryptocoin. com

As , we have compiled the opinions of analisdollarserin from different institutions on the course of gold prices.

Analisdollarser, Fed’s decisions

states that is important for gold

It should be noted that higher Treasury yields increase the opportunity cost of holding interest-free gold. DailyFX currency strategist Ilya Spivak comments on the Fed’s stance and its impact on gold prices:

A modest acceleration in inflation reinforces the idea that the Fed is more likely to make a more official statement that a contraction is imminent. The reaction of gold will be negative because the possibility of reducing the incentive is something that increases the returns.

US consumer price data will be released at 12.30pm. sdollarser expects core CPI, an index that excludes variable energy and food prices, to increase by 0.3% month-on-month in August. Avtar Sandu, senior commodities manager at Phillip Futures, stated the following in a related note:

Another increased pressure could serve as a data point, challenging some Federal Reserve policymakers’ view that inflation will be temporary.

The data comes ahead of the Fed’s key policy meeting September 21-22, when markets will closely follow the announcement of when the central bank will begin ending its pandemic-era bond-buying program. On the technical front, spot gold could retest the resistance at $1,798, and a break above it could provide a gain at $1,807, according to Reuters technical analyst Wang Tao. Holgs of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 0.2% to 1,000.21 tons on Monday, from 998.17 tons on Friday.

Alberto de Case: The scenario is driven by uncertainty and central banks

Gold futures closed higher on Monday, but failed to retrace the $1,800 an ounce threshold as the US dollar started the week on a solid note. Carlo Alberto de Case, market analyst at Kinesis, said the strength in the dollar was the main reason why gold touched the $1,790 per ounce support zone. However, the analyst made the following assessments in a statement to MarketWatch:

Fears about the spread of the COVID-19 delta variant and the possibility of the Federal Reserve again delaying the onset of contraction are the main supporting factors for the gold price. Overall, the scenario is driven by uncertainty and a series of mostly central banks and dollar moves.

Oanda senior market analyst Craig Erlam shared his thoughts in a market conversation:

Policymakers seem keen to ensure that k data does not stray from the central bank’s shrinking dollar series this year, realizing the importance of effective communication as they approach major policy shifts. This gold is left behind, even as the data softened.

Carsten Fritsch: Inflation should not have a significant impact on gold unless it deviates significantly from expectations

Ahead of next week’s Fed policy meeting, Commerzbank analyst Carsten Fritsch made the following points in a note:

There is a lot to come this week, but gold can still be traded cautiously. Traders seem to be preparing for the August US Consumer Price Index, or CPI, currently due on Tuesday.

Carsten Fritsch expects inflation to come close to July levels and therefore “present arguments for the Fed to start pulling back on bond purchases before the year is out.” This could be a headwind for gold, according to analyst Myra P. Saefong, as the rise in Treasury yields will increase the opportunity cost of holding non-yielding assets.

A stronger dollar is also negative for commodities that are priced in the unit, making them more expensive for users of other currencies. The US Dollar Index DXY, a measure of the currency against a basket of six major competitors, rose 0.1%. Treasury yields weakened in Monday trading after climbing Friday. However, Carsten Fritsch said that Commerzbank sdollarseries do not expect Fed policymakers to make any decisions on the fate of the central bank’s asset purchase program at its meeting next week, and shared his expectations:

But in the prevailing market view, this is very likely to happen at one of the two subsequent meetings. For this reason, inflation figures should not have a significant impact on the gold price unless they deviate from expectations.

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Michael Lewis


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