Gold Runs Out of Steam, CPI Becomes Key Factor
Gold prices weakened at the start of the European session. The US dollar regained demand, while some market participants opted to take profits after the previous sharp volatility. Gold briefly moved below the 4,150 per troy ounce area, and the market remained cautious, awaiting major data later tonight.
Another pressure factor comes from physical demand. Following the Diwali festival in India, the second-largest gold consumer, buying interest could decline, narrowing the room for price increases. Many traders are tidying up their positions, reducing risk, and awaiting new direction from US inflation data.
Today's main focus is the release of the US CPI for September. Economists forecast headline inflation at around 0.4% monthly (around 3.1% annually) and core inflation at 0.3% monthly (around 3.1% annually). If the results are above expectations, the dollar typically strengthens, putting pressure on gold; if they are more subdued, the dollar could weaken, and gold could rebound.
However, there are supporters on the sentiment side. The prolonged US government shutdown and global trade tensions could maintain interest in safe-haven assets. Expectations of future Fed rate cuts also reduce the "opportunity cost" of holding gold. In other words, the short-term direction is determined by the CPI, but gold's underlying support remains intact. (asd)
Source: Newsmaker.id
