Gold prices held steady around US$4,400 per troy ounce during Thursday’s trading (August 13) after relatively contained US inflation data eased pressure on the Federal Reserve to raise interest rates in the near term. Gold had previously gained approximately 0.9% during Wednesday’s session.
US CPI data showed consumer prices rose just 0.1% month-on-month in July. These results signaled that the impact of the energy price surge linked to the Iran conflict was beginning to subside and that inflationary pressure was not accelerating further.
The data also lowered market expectations for an interest rate hike at the Fed’s September meeting. Investors will now closely monitor upcoming labor and inflation data, as well as remarks from Fed Chair Kevin Warsh at the Jackson Hole symposium later this month.
However, inflation risks have not entirely vanished. A fresh escalation in the Middle East could potentially drive energy prices up again. Oil prices are heading for a weekly gain as the market tracks developments in US-Iran negotiations and efforts to reopen the Strait of Hormuz.
Gold continues to find support from growing investor interest and central bank buying, particularly from China. The rally over the past few weeks has kept gold well above the US$4,000 level and allowed it to break through the 100-day moving average for the first time since April. Spot gold was last trading around US$4,403 per troy ounce.
Newsmaker Analysis: Relatively benign CPI data has kept sentiment toward gold positive as the risk of a September Fed rate hike diminishes. As long as gold maintains the US$4,400 level—and provided the dollar and yields do not surge again—there remains a possibility of testing the US$4,450 to US$4,500 range. However, an oil price spike driven by an escalation in the Strait of Hormuz could reignite inflation risks and cap gold’s gains. (asd)*
Source: Newsmaker.id