Trending
Gold
Source: Newsmaker.id
Gold prices strengthened to around US$4,050 per troy ounce during Wednesday’s (Nov 11) trading session, recovering some ground after a 2.67% decline in the previous session. This rebound follows a sharp sell-off triggered by U.S. inflation data that exceeded forecasts, alongside hawkish signals from several Federal Reserve officials.
The U.S. Consumer Price Index (CPI) for October rose by 0.4% month-on-month, surpassing the 0.3% estimate. Meanwhile, core CPI increased by 0.3%—beating the 0.2% expectation—and signaling that inflationary pressures remain quite robust.
These conditions reinforce expectations that the Federal Reserve will maintain a tight monetary policy. The market has fully priced in an interest rate hike for December, with the possibility of a 50-basis-point increase now being taken more seriously.
Prior to the CPI release, Federal Reserve Governor Christopher Waller had suggested that a 50-basis-point hike in December could be considered if core CPI reached 0.3% or higher. With the data hitting that threshold, the market is increasingly focused on just how aggressive the Fed’s actions might be.
Expectations for higher interest rates have bolstered the U.S. dollar and pushed Treasury yields upward. The dollar index is hovering around the 102.5 level, while higher yields pose a challenge for gold, as the precious metal does not generate a yield itself.
Nevertheless, gold has managed to hold its ground near the US$4,000 mark, indicating resilient demand at that level. Ongoing central bank purchases and capital inflows into gold-backed ETFs continue to provide support, suggesting that the price recovery has not yet run out of steam.
Newsmaker Analysis: Gold’s current rebound continues to face pressure from a strengthening dollar, rising Treasury yields, and an increasingly hawkish outlook for the Federal Reserve following U.S. CPI data that once again highlights persistent inflationary pressure. However, gold’s ability to hold around the US$4,000 level indicates that this price point remains a key defensive area for buyers. Should expectations for a 50-basis-point rate hike begin to subside, gold could potentially continue its recovery. Conversely, if the dollar and bond yields continue to strengthen, gold’s rebound risks being stalled once again, and selling pressure may persist. (arl)
Source: Newsmaker.id