Gold price rises on weaker dollar ahead of US inflation data. gold inflation usa
The swift reversal comes just after speculators turned against the metal, which can accelerate price gains if they buy the futures back to limit losses. Hedge funds trading on the Comex substantially boosted their bearish bets to the highest in a month last week, according to data from the Commodity Futures Trading Commission.
“A bit of dollar weakness on top of recent short selling by funds was all it took to get the ball rolling,” Ole Hansen, head of commodity strategy at Saxo Bank A/S,Economists forecast the August US inflation would slow for the second month in a row to 8.1%, potentially easing pressure on the central bank to keep aggressively hiking rates. Still, Fed officials last week seemed to point to another super-sized increase of 75 basis points in September.
The European Central Bank recently lifted rates by 75 basis points and is prepared to do the same when the committee meets in October, according tosources. The move is supporting the euro against the dollar, while providing relief for gold. “Against recent sharp moves in USD and rates, gold has been relatively resilient,” Bank of America analysts including Michael Widmer wrote in a“Meanwhile the Fed signaling a slowdown in the hiking cycle may ultimately bring new buyers into the market, so we continue to expect upside to gold as we move into 2023.”
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