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Steady Ahead Of US CPI Data

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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.
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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.