Are US inflation figures slowing down the price of Gold? – Commerzbank

The Gold price has continued to rise, reaching a new record high at the start of the new week, currently at $3,660 per troy ounce, Commerzbank's Head of FX and Commodity Research Thu Lan Nguyen notes.

Gold to push further upward

"Speculation about US interest rate cuts is the main driver behind this increase. The US labor market report published on Friday was (once again) surprisingly poor. In August, just 22,000 jobs were created, following an already very weak increase of around 80,000 jobs in the previous month. The situation on the labor market has thus deteriorated significantly within a short period of time."

"A 25 basis point interest rate cut by the US Federal Reserve next week is now fully priced in. Some even see the possibility of a larger move. However, speculation could be dampened significantly if the US inflation data due to be released this week shows a stronger than expected rise in prices. So far, the rise in consumer prices as a result of US tariffs has been more moderate than expected."

"Most people are likely to assume that prices will continue to rise only gradually. Against this backdrop, the inflation figures have great potential for a sharp market correction if they show a significantly stronger price surge. If, on the other hand, they turn out to be surprisingly weak, the market is likely to bet more heavily on a 50-basis-point interest rate hike, pushing Gold further upward."