Gold futures posted their first loss in three sessions on Wednesday, reversing nearly all of Tuesday’s gains and pushing prices to a nearly two-week high. According to analyst Myra P. Saefong, Tuesday’s US inflation data proved supportive for precious metal prices, pushing gold futures to their highest level since early September as the US dollar fell. For analysts’ gold comments cryptocoin.com keep reading.
Gold comments from AvaTrade and BullionVault analysts
The US consumer price index rose just 0.3% in August, compared to a 0.5% increase in July. Asked about gold comments, AvaTrade chief market analyst Naeem Alsam said:
Tapering uncertainty is the most important factor for gold, and gold prices are likely to remain in the consolidation zone unless we get any clarity on this.
Looking at the economic data, Naeem Alsam states that there is not much pressure for the Central Bank to take an aggressive stance at its meeting next week and makes the following inference:
However, traders still believe that a reduction (monthly bond purchases) is on the table for this year. The most important event for the gold price right now is the meeting next week, and until then, gold prices are likely to continue their whiplash movements.
Adrian Ash, director of research at BullionVault, comments on the expectations below:
Inflation growth in 2021 is well beyond 1970s levels, but it has gone global as energy prices have risen, and yet gold is not responding to it. For now, it’s clear that the precious metals market agrees with central bankers that this increase in inflation is temporary. However, if this energy turmoil continues and a winter fuel crisis pushes inflation back up, gold at today’s $1,800 may seem cheap on a temporary glance.
Carlo Alberto De Casa: Investors expect more clarity from Fed on timing of rate cut
Meanwhile, some analysts say the Fed’s meeting next week may not provide the clarity investors are looking for. Kinesis Money analyst Carlo Alberto De Casa points out in a daily research note for gold reviews:
Indeed, investors expect more clarity from the Fed on the timing of the rate cut. However, this will likely not come at the September meeting, increasing the chances of holding the bonds in the current uncertainty, waiting for a clear direction.
US data released on Wednesday showed that the cost of goods fell for the first time in 10 months in August, with the import price index falling 0.3%. Separately, the New York Fed’s Empire State index of business conditions rose 16 points to 34.3 in September, according to the regional Fed bank. But economists were expecting a data of 17.2, according to a survey by The Wall Street Journal.
US industrial production rose 0.4% last month, less than expected, and capacity utilization rose to 76.4%, the highest rate since December 2019. Against this backdrop, the US dollar index (DXY) fell 0.1% to 92.53. Meanwhile, benchmark 10-year Treasury yields stand at around 1.311, up 1.319% after Tuesday’s slide. According to analyst Myra P. Saefong, a weaker dollar and lower yields could support non-yielding bullion purchases among overseas investors.
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