empty
 
 

Forex Analysis & Reviews: XAU/USD: Medium-term outlook after inflation result
time 11.08.2022 04:20 PM
time Relevance up to, 08.09.2022 12:44 PM

This image is no longer relevant

The market is slowly recovering from yesterday's storm. And the reason for this was the publication (at 12:30 GMT) of inflation figures for the United States. As follows from the report presented by the Bureau of Labor Statistics, the consumer price index (CPI) came out in July with a value of 8.5% (on an annualized basis), which was lower than the forecast of 8.7% and the previous value of 9.1%. Core CPI (excluding food and energy prices) remained unchanged at 5.9%, which was also below the forecast growth to 6.1%.

On a monthly basis, core inflation rose by 0.3% after a 0.7% rise in June, also indicating a slowdown in its growth rate.

Weaker inflation data significantly dampened expectations for a larger Fed rate hike, putting pressure on the dollar.

Now the probability of a 75 bps Fed rate hike fell to 35% in September from 80% (before the publication of the CPI), according to the CME Group, which also affected the yield of US Treasury bonds, causing it to sharply decline.

Thus, the yield of 10-year US Treasury bonds popular with investors fell yesterday to an intra-week low of 2.688% and currently stands at 2.770%, which also corresponds to 3-month lows.

This image is no longer relevant

The weakening of expectations for further, tougher actions by the Fed (while still maintaining a relatively high level of inflation) and a decrease in the yield of US government bonds put pressure on the dollar. Its DXY index fell yesterday to 104.52, the lowest since early July, breaking through support at 106.00, 105.00.

Meanwhile, some economists warn that excessive pessimism about the dollar, which fell yesterday on weaker CPIs, may not be entirely appropriate, citing lingering geopolitical risks given the upcoming US midterm elections this fall.

Considering the current situation and the weakening of the dollar against the background of the remaining high inflation, gold quotes yesterday updated a 6-week high near the mark of $1807.00 per ounce.

One way or another, inflation in the world and the United States remains high, which makes investors resort to buying this popular defensive asset.

Its quotes are extremely sensitive to changes in the monetary policy of the world's leading central banks, especially the Fed. If the leaders of the US central bank, after yesterday's release of inflation indicators, announce a softer scenario in the tightening cycle of monetary policy, then gold may receive additional support.

Gold does not bring investment income but is in active demand during geopolitical and economic uncertainty, and a protective asset in the face of rising inflation. Now is just such a moment.

This image is no longer relevant

At the same time, note that gold quotes are again in the area of the key level of 1800.00, and some representatives of the Fed said yesterday that it is too early to announce "victory over inflation."

Thus, Minneapolis Fed President Neel Kashkari said yesterday that he "does not see anything that would change" the need for the Fed to raise the discount rate to 3.9% by the end of the year and to 4.4% by the end of 2023. While, Chicago Fed President Charles Evans called inflation "unacceptably" high.

Probably, at the meeting on September 20–21, the Fed will raise the rate by 0.50%, not by 0.75%, as previously thought. Still, this is a relatively large (for the Fed) step in the rate hike cycle.

Thus, in the coming weeks, we are likely to see a fight between buyers and sellers of gold and fluctuations in the XAU/USD pair between the levels of 1780.00 and 1820.00.

As for the news for today, it is worth paying attention to the publication of a block of American macro statistics at 12:30, which may increase volatility in the market if the data differs greatly from the forecast.

Jurij Tolin,
ผู้เชี่ยวชาญด้านการวิเคราะห์ของ InstaForex
© 2007-2023
EURUSD
Euro vs US Dollar
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
Start trade
Start trade

บทวิเคราะห์ของทาง InstaForex จะทำให้คุณทราบถึงแนวโน้มของตลาด! ในการที่เป็นลูกค้าของทาง InstaForex นั้นคุณจะได้รับการบริการเพื่อการซื้อขายอย่างเต็มประสิทธิภาพอย่างมากมาย

  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    เข้าร่วมการแข่งขัน
  • Chancy Deposit
    ฝากเงินในบัญชีของคุณใน $3,000 และรับ $1000 ไปเพิ่ม!
    ใน กุมภาพันธ์ ทางเราได้ออก$1000 ภายในแคมเปญ Chancy Deposit !
    คว้าโอกาสที่จะชนะด้วยการฝากเงิน $3,000 ไปในบัญชีเทรด เมื่อทำตามเงื่อนไขนี้แล้ว คุณก็จะกลายเป็นผู้เข้าร่วมแคมเปญ
    เข้าร่วมการแข่งขัน
  • เทรดให้ดีแล้วคว้ารางวัล
    เติมเงินในบัญชีของคุณอย่างน้อย $500 สมัครเข้าร่วมการแข่งขัน และลุ้นรับรางวัลอุปกรณ์ติดต่อสื่อสารแบบพกพา
    เข้าร่วมการแข่งขัน
  • โบนัส 100%
    โอกาสพิเศษของคุณในการรับโบนัส 100% จากเงินฝากของคุณ
    รับโบนัส
  • โบนัส 55%
    สมัครรับโบนัส 55% สำหรับการฝากทุกครั้ง
    รับโบนัส
  • โบนัส 30%
    รับโบนัส 30% ทุกครั้งที่คุณเติมเงินในบัญชีของคุณ
    รับโบนัส

Recommended Stories

GBP/USD. Overview for February 7, 2023

Without even an indication that a correction was about to start, the GBP/USD currency pair resumed its downward trend on Monday, which started after last week. As market participants might

Paolo Greco 06:02 2023-02-07 UTC+2

EUR/USD. Overview for February 7, 2023

As predicted yesterday, the EUR/USD currency pair continued to decline on Monday, albeit with less volatility. Given that neither the US nor the EU released any significant macroeconomic information

Paolo Greco 05:39 2023-02-07 UTC+2

Turkey halted oil exports after major earthquake

Oil rebounded from lows as flows to a key Turkish terminal were suspended and part of a major European field was shut down. The US crude oil benchmark known

Andrey Shevchenko 22:56 2023-02-06 UTC+2

What conclusions can we draw after three meetings?

As a result, meetings of the three central banks took place last week. As analysts and economists have been formulating theories regarding interest rates and the rhetoric of central bank

Chin Zhao 18:25 2023-02-06 UTC+2

AUD/USD: Australian dollar awaits RBA verdict

During Tuesday's Asian trading session, the Reserve Bank of Australia will summarize the results of its first meeting of the year. This is by no means a passing event, although

Irina Manzenko 17:38 2023-02-06 UTC+2

AUD/USD: ahead of the RBA meeting

After rebounding last Thursday from a local 10-month low of 100.68, the dollar index (DXY) rose sharply on Friday. The U.S. labor statistics published on Friday contributed to the strengthening

Jurij Tolin 17:26 2023-02-06 UTC+2

Three reasons for euro's weakness

Who is to blame for a collapse in the EUR/USD pair? Christine Lagarde with her confusing comments? Surprisingly strong data on the US labor market for January? Or the Chinese

Marek Petkovich 14:53 2023-02-06 UTC+2

What does lower inflation mean for the dollar?

On August 25, 2022, participants from 34 countries gathered in Jackson Hole, Wyoming for the annual economic policy symposium hosted annually by the Federal Reserve Bank of Kansas City

Irina Yanina 11:45 2023-02-06 UTC+2

Wall Street has mixed views on gold

Investors waiting for an opportunity to enter the gold market found their chance on Friday, when the US released an unexpectedly strong employment report for January. The data said 517,000

Irina Yanina 10:23 2023-02-06 UTC+2

Pound: An ugly duckling in Forex

Numerous dovish signals from the Bank of England and a surprisingly strong U.S. jobs report for January dropped GBPUSD to a region of monthly lows. There is nothing worse

Marek Petkovich 09:41 2023-02-06 UTC+2
หากไม่สะดวกคุยในตอนนี้
ระบุคำถามไว้ได้ใน แชท.