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Source: Newsmaker.id
Gold prices (XAU/USD) strengthened again during Thursday’s trading, maintaining positive momentum above the US$4,150 per troy ounce level. This gain followed a retreat in the US dollar from an 18-month high, while a decline in US government bond yields provided additional support for the non-yielding safe-haven asset.
The initial market reaction to hotter-than-expected US inflation data has begun to subside. The Consumer Price Index (CPI) for September showed annual inflation rising from 3.4% to 3.7%, surpassing market expectations. Core CPI also climbed to 2.6% from 2.4% in August, signaling broadening price pressures within the US economy.
Despite persistent inflation, the market anticipates that the Federal Reserve is unlikely to rush into an interest rate hike at its October meeting. San Francisco Federal Reserve President Mary Daly noted that while further rate hikes may still be necessary, she provided no indication that such an increase would occur as early as the October meeting.
A decline in US Treasury yields subsequently pressured the dollar, helping gold recover some of its earlier losses. Nevertheless, the outlook for Federal Reserve policy remains a critical factor; inflation driven by rising energy costs could potentially reignite expectations for further interest rate hikes.
Market attention will now shift to the US Producer Price Index (PPI) data, due for release on Thursday. This data will offer further insight into inflationary pressures and the likely direction of Federal Reserve policy. Amidst geopolitical uncertainty and a weakening dollar, gold has the potential to sustain its positive momentum, though investors should remain cautious of potential volatility leading up to the PPI release. (asd)
Source: Newsmaker.id