Global financial markets pulled back slightly ahead of investors’ Consumer Price Index (CPI) report today. The details of the US consumer inflation rates for July, which will be announced around 15:00 CET today, may have an impact on the US Federal Reserve’s (FED) interest rate hike. That’s why many traders are looking into the details of this data. Meanwhile, gold prices slid from a one-month high on Wednesday amid rising bond yields. Here are the predictions for the crypto money market and gold before today’s data…
The latest situation in the crypto money market before the CPI data
Ahead of the data, trader activity caused the Bitcoin price to retrace to $22,876 daily. At this point, bullish reinforcements are trying to push the coin above the $23,000 support. Similarly, Ethereum managed to pull its bottom buyers price back near the $1,700 support. Prior to that, it fell 8 percent from Monday’s highs to $1,669 daily. As it stands, the consensus from analysts in the markets is that July data will be lower than the record 9.1 percent seen in June.
However, it is still expected to be well above the historical average of 2 percent, as the Fed stated. The fear that inspired the crypto market pullback on Tuesday was addressed by analyst Michaël van de Poppe, who detailed key support and resistance levels to watch out for. Poppe’s tweet stated that “the trend is still up” despite the current correction. He defined $21,300 as the level that must be held to continue the trend.
Overall, analysts suggest the outlook will become clearer after the report is released on Wednesday. Crypto traders are fleeing to stablecoins while waiting for an update from the Fed. Meanwhile, relatively few tokens in the top 200 were protected from Tuesday’s pullback. Among the top performers of the day is Spell (SPELL), which rose 32 percent to $0.00159. It is followed by Celsius (CEL) up 18 percent and Reserve Rights (RSR) up 8.3 percent. The overall cryptocurrency market cap is currently $1,088 trillion and Bitcoin’s dominance rate is 40.5 percent.
What’s next for gold?
On the other hand, spot gold hit $1,800.29 yesterday, its highest level since July 5th. After that, it fell to $1,789.29 per ounce. U.S. gold futures were down 0.3 percent at $1,806.10. “Obviously the focus is on US inflation data,” said Ilya Spivak, currency strategist at DailyFX. Also, what really matters is where prices are currently trading at $1,800, which is a very important level here,” he said. Apart from that, he uses the following expressions:
If the inflation figure comes in stronger than expected, after last week’s solid jobs report, we may see some rate cut expectations for next year come out of the forecast, which would turn negative for gold.
On the other hand, ANZ analysts warned in a note that “further rate hikes will be necessary for central banks to rein in persistently high inflation.” “Investors are waiting for the July consumer price index to cool a bit. However, strong wage growth and higher labor costs could undermine that.” said.
Inflation expectation, downward
Daniel Pavilonis, senior market strategist at RJO Futures, also noted that gold is currently benefiting from a softer dollar and Russia-Ukraine situation. He said the focus was on what was in the CPI on Wednesday. A New York Fed survey showed on Monday that US consumers’ expectations of where inflation will be in one year and three years fell sharply in July. cryptocoin.com As we have also reported, various central banks have been trying to rein in rising inflation lately. For this, gold faced pressure due to raising interest rates.
“Tomorrow, a softer inflation figure, especially on the core side, could be the catalyst for an upside break (for gold prices), while a stronger figure could make $1,800 out of reach for the foreseeable future,” said OANDA analyst Craig Erlam. Analysts surveyed by Reuters expect annual inflation to fall to 8.7% from 9.1% in June.
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