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Gold jumps above $4,400 as traders look to upcoming US inflation
Gold added 3.6% over the prior two sessions and is trading above its 100-day moving average ahead of Wednesday’s CPI report.
Gold climbed above $4,400 an ounce in early trading, marking a two month high as traders shifted focus to an upcoming US inflation report that could shape expectations for Federal Reserve policy. Bullion was up about 3.6% over the previous two sessions, helped by technical signals after it rose through the 100 day moving average.
LiveMint Markets, citing Bloomberg, said the move also reflects a broader recovery narrative, including technical buying linked to dip buyers and increased inflows from gold backed exchange traded funds in China. Vantage Markets analyst Hebe Chen said the pieces around gold are starting to fall into place and that the rebound is breaking from a downside pattern that began in March.
Attention then turned to Wednesday’s CPI, with economists in a Bloomberg survey looking for consumer prices to rise 0.1% in July after a 0.4% drop in the prior month. The article also noted that while cooler price growth could ease inflation anxiety after a weak jobs report, renewed pressure from higher energy prices could increase the odds of further rate hikes, which would typically weigh on gold since it does not pay interest.
The same report pointed to additional drivers for inflation expectations, including a hardening US stance toward Iran that raises the risk of disruptions affecting energy markets. It also referenced comments from Fed officials, including Cleveland Fed President Beth Hammack, who said it is possible multiple rate hikes would be needed to bring inflation back to the Fed’s 2% target.
Latest closeGold $4,448.60 ▲2.5%