14.09.202110:46 Forex Analysis & Reviews: Gold prices barely move as US inflation data awaited

Exchange Rates 14.09.2021 analysis

Yesterday both bullish and bearish trends were seen in the gold market. However, the first one was a bit stronger, as a result, gold closed the session with a modest increase.

Since Monday this week, gold prices have gained 0.1% or $2.30. Last week on Friday, they lost 0.4%. Gold closed the trading session at $1,794.40. During the session, gold hit the low of $1,784.40 and reached 20 cents above its key level of $1,800. It is the highest level since August 3.

Exchange Rates 14.09.2021 analysis

The US dollar imposed limits on gold prices. On Monday, the dollar rose 0.1% against its counterparts. The Fed's hawkish comments accelerated the US dollar rally.

Recently, Federal Reserve Bank of Philadelphia Governor Patrick Harker joined the supporters of hawkish policy voting for earlier tapering. Following his colleagues, he voiced support for accelerating the reduction in monthly asset purchases.

Also on Monday, gold's upward trend was curbed by an increase in traders' appetite for riskier financial instruments, such as stocks. This is confirmed by the generally positive sentiment observed yesterday on the American stock market.

At the same time, the demand for the safe-haven asset is supported by reports of new devastating consequences of natural disasters. Super Typhoon Chantu continues to bring destruction to the cities in Southeast Asia, while Tropical Storm Nicholas made landfall in the US.

In addition, increasing concerns about the rapid spread of the delta strain of coronavirus and the global economic downturn are fueling investors' interest in gold. Analysts believe that these factors can influence the US Federal Reserve's decision on its monetary policy.

Amid the risks, the US regulator may once again postpone the start of asset purchase cuts for a longer period of time. At least, now more and more analysts are inclined to believe that the Fed will not make any decision on this issue at the meeting on September 22.

Also, many experts agree that gold will continue to trade mainly in a sideways range until next week's key event. The breakout trend will depend mainly on the dollar exchange rate.

The greenback will be traded based on the statistics. Several important reports are scheduled for release this week, and one of them will be published today. Investors are waiting for the consumer price index in the US.

Economists forecasted the inflation rate in August rose 5.3% yearly, while on a monthly basis this reading reached 5.4%, which is the highest since 2008.

Oanda's experts think that if the US inflation holds above 5% till the end of the year, it may trigger growth for the dollar and bond yields, which is unfavorable for the bulls on the gold market.

Looking ahead of the US consumer price index, which may hint at the Fed's decision next week, the gold market holds still. Bulls and bears are not taking risks amid the existing uncertainty, so gold still remains wedged in a narrow flat channel.

Thus, at the moment of writing this article, the price for gold modestly decreased by 0.08%, or $1.35, declining to $1,793.05. Silver also fell in price. On Tuesday morning, silver was trading at $23,695. Compared to Monday, when it lost 0.4% in price, today the metal fell even more by 0.42%.

lena Ivannitskaya,
Odborný analytik spoločnosti InstaForex
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