Gold Price Forecast: XAUUSD to come under further downside pressure on CPI reading above 9%
|Gold started the month of August on a firm footing and climbed toward $1,800 before erasing a portion of its weekly gains on Friday. According to FXStreet’s Eren Sengezer, recovery could end if US CPI data confirms a 75 bps Fed hike.
July inflation data from the US could trigger a strong reaction
“On Wednesday, the US Bureau of Labor Statistics will release the Consumer Price Index (CPI) figures for July. On a yearly basis, the CPI inflation is forecast to edge lower to 8.9% from 9.1% in June. The market reaction to inflation data should be pretty straightforward with a higher-than-expected CPI print triggering a dollar rally and a soft reading forcing the currency to face renewed selling pressure.”
“A CPI reading above 9% should allow hawkish Fed bets to continue to dominate the market action and ramp up the bearish pressure on gold.”
“On Friday, the University of Michigan will release its flash Consumer Sentiment Index for August. In July’s final version, the long-run inflation expectations stood at 2.8%. Any reading above 3% could help the dollar gather strength and hurt XAU/USD while a 2.8%-or-lower print should weigh on the USD.”
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