Free Trial

Steady Ahead Of US CPI Data

GOLD

Gold is slightly lower in today’s Asia-Pac session, after closing 0.3% lower at $2465.16 on Tuesday.

  • Bullion’s relative stability came despite a strong rally in US Treasuries following lower-than-expected PPI data. The front end paced the gains in a bull-steepener, with the 2-year yield declining 9bps to 3.93%, the lowest since last Monday. The 10-year yield fell 6bps to 3.84%.
  • PPI final demand was softer than expected in July at 0.10% m/m (cons 0.2%). Within the components that feed into PCE calculations, hospital inpatient services offer the greatest moderation on the month as inflation slowed from 0.41% to 0.16% m/m. It was however partly offset by portfolio management fees rising 2.3% m/m after 0.6% in June.
  • Fed Bostic said interest rates will fall by the end of the year if the economy performs as he expects.
  • US CPI is due for release later today, with the market hoping for more clues on the Federal Reserve’s interest rate path.
  • Lower rates are typically positive for gold, which doesn’t pay interest.
  • According to MNI’s technicals team, attention is on $2483.7, the Jul 17 high and a bull trigger. Clearance of this hurdle would resume the uptrend.

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.