Gold Breaches US$4,400; CPI Looms as Major Test
Gold prices continued to rise during Tuesday's trading (August 11), briefly breaching US$4,400 per troy ounce. Spot gold hovered around US$4,395 after gaining approximately 3.6% over the previous two sessions. Technical buying momentum remains strong after gold successfully cleared several key moving average levels.
The gold rally continues to draw support from weakening US labor data. July's Non-Farm Payrolls (NFP) report showed a decline in job numbers, causing the market to scale back expectations for a near-term Federal Reserve interest rate hike. The dollar also weakened following the data release, providing additional support for gold.
Investor interest in gold remains robust. "Buy-the-dip" activity persists, while inflows into gold ETFs in China have increased. Central bank gold purchases also continue to provide a crucial floor for the precious metal's price.
The market's primary focus is now on the US Consumer Price Index (CPI) data due for release on Wednesday. This inflation data will determine whether the Fed retains a compelling case for raising interest rates. With the market anticipating annual inflation to remain around 3.4%, the actual figures could trigger significant volatility across gold, the dollar, and Treasury yields.
However, inflation risks stemming from energy prices have not dissipated. Oil prices surged again after US-Iran tensions cast doubt on the prospects of a full reopening of the Strait of Hormuz. Brent and WTI saw sharp gains on Monday, prompting the market to once again factor in energy-driven inflation risks that could keep the Fed in a hawkish stance.
Newsmaker Analysis: Gold's momentum remains bullish after breaking through the US$4,400 mark. However, the CPI report represents the next major hurdle. Inflation coming in lower than expected could pave the way for a rise toward the US$4,450–US$4,500 range. Conversely, a "hot" CPI reading could boost the dollar and yields, potentially triggering profit-taking following gold's sharp rally. (asd)*
Source: Newsmaker.id
