Gold Holds Firm; US CPI to Determine Next Direction
Gold prices held steady during Monday's trading (August 10), though the metal struggled to extend gains following last week's sharp rally. XAU/USD traded around US$4,345 per troy ounce, having touched an intraday high of US$4,362.
The previous week saw gold strengthen by over 7%, reaching its highest level since June 17. This rally was driven by shifting market expectations regarding Federal Reserve policy following weaker-than-expected US Nonfarm Payrolls data, which reduced the likelihood of interest rate hikes.
Gold sentiment also benefited from easing concerns over energy-related inflation. Reports indicate that Iran and Oman are nearing a deal to reopen the Strait of Hormuz, a development that has pushed oil prices down and alleviated inflationary pressure from the energy sector.
However, the decline in the US dollar and Treasury yields remains limited, as oil prices stay above pre-war levels. The US Dollar Index (DXY) is hovering around 99.70, while the 10-year US Treasury yield is trading near 4.67%, down from a recent peak of approximately 4.74%.
Regarding market impact, gold has the potential to remain at elevated levels as long as expectations for Fed rate hikes continue to subside. However, the primary focus now shifts to US CPI data on Wednesday and PPI data on Thursday. Should US inflation come in lower than expected, gold could see further gains as the dollar faces renewed downward pressure. Conversely, if CPI figures are hotter than anticipated, XAU/USD could be vulnerable to a correction as markets reprice the probability of a more hawkish Fed policy stance. (asd)*
Source: Newsmaker.id
