Experts note that the gold price outlook for the period is positive. But they say profit booking is widely expected following the recovery in the dollar index. The Bitcoin and altcoin market, on the other hand, is taking a cautious stance after the strong US NFP report. We have compiled the experts’ comments on data and developments that are likely to affect the gold and crypto markets for our readers.
Gold and crypto investors will keep an eye on US CPI data
cryptocoin.comAs you follow, gold climbed to a one-month high last week, testing key $1,800 levels. On the crypto front, Bitcoin fell hard after climbing above $ 24 thousand. However, it has managed to bounce back above $23,000 and is consolidating here. A key variable behind the recent surge in bullion prices was the dollar index’s fall near the 105 mark. Also, tensions rose between China and Taiwan during the visit of US House of Representatives Speaker Nancy Pelosi to Taiwan. This supported the interest in gold as a safe haven.
According to bullion experts, the overall outlook for the gold price is positive. However, experts expect profit reservations after the recovery in the dollar index. They also predict that the spot gold price will be around $1,750 to $1,720. Crypto analysts, on the other hand, are closely following the Fed’s stance. The record level of US employment data shows that the Fed will not back down from its hawkish stance.
Important data and developments that may affect the gold and crypto market
However, the US CPI data to be released next week will give clues about the Fed’s action. That’s why it’s very important for gold and crypto investors. In this context, it is useful to look at the triggers that are likely to affect the movement of gold, Bitcoin and altcoin prices in the near term.
US CPI data
According to Sugandha Sachdeva, Vice President of Commodities and Currency Studies at Religare Broking, the main trigger for the gold price will be the US Core CPI and CPI data for July, which will show inflationary trends in the economy. Sachdeva makes the following statement:
Annual inflation in the US rose to 9.1% in June, the highest level in 41 years. Just a moderation in price pressures will mean the Fed will slow the pace of monetary tightening. Therefore, upcoming inflation data will be very important.
dollar index (DXY)
Sugandha Sachdeva notes that eyes will be on the movement of the dollar index as well. According to the Expert, DXY appears to have established a base at 105 and is expected to maintain good bid levels, at least in the near term. In this context, Sachdeva makes the following assessment:
It is possible that this is an important upside head for gold prices. On the contrary, if DXY breaks the lock 105 mark, it will provide a push below to continue its upward momentum.
US Fed speeches
“We have received speeches from two key Fed officials who will line up next week to shed light on the Fed’s monetary policy path ahead,” says the Religare expert.
USA – China – Taiwan issue
Anuj Gupta, Vice President of Research at IIFL Securities, made the following statement on geopolitical tension:
After the Russia-Ukraine war, fresh geopolitical tensions rose between the US and China that could hold back gold demand in the near term. We think that the further escalation of tensions between the USA and China over Taiwan will support the rise in gold prices.
Eurozone, other industry figures
UK and Eurozone industrial production data, Chinese CPI and PPI data and OPEC monthly report will come. According to experts, this data will provide plenty of clues for gold and crypto prices. It will also keep precious metal prices volatile throughout the week.
Weekly economic and financial comments
The Welss Fargo research team interprets how developments and data affect markets.
US: July jobs report quells current recession fears
Employers added more than half a million jobs in July. This smashed arguments that the US economy is currently in recession. However, other labor market indicators point to a more pronounced slowdown. The jobs report for July puts more pressure on the Fed to act aggressively in its fight against inflation.
International: A new round of rate hikes from central banks
The Bank of England raised its policy rate by 50 basis points this week. Thus, it accelerated the pace of monetary tightening. It also announced that it would begin active selling of government bonds shortly after its announcement in September. The Reserve Bank of Australia (RBA) also increased interest rates by 50 basis points. But it pointed to a more flexible approach going forward. We expect the RBA to return to 25 basis points gains from September. Meanwhile, Brazil’s Central Bank increased its Selic Rate by 50 basis points this week. We now expect the last 25 basis points increase in the September monetary policy announcement to reach 14.00%.
Credit market insights: Household debt rises in Q2
Total household debt balances increased by 2% from the previous quarter to $312 billion in the second quarter of this year. Household debt has now exceeded $16,000. Hence, it has raised over $2,000 since the start of 2020.
Topic of the week: Tension in Taiwan
The visit of Speaker of the House of Representatives Nancy Pelosi to Taiwan made one thing clear. That said, US-China tensions aren’t going anywhere anytime soon. In addition, international trade between the two countries continues to remain in balance.
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