Gold constrained by strong US dollar index

The world gold price today (November 8) extended its decline as the dollar index and US Treasury yields rose sharply, putting pressure on the precious metal market.

According to the latest report, in July 2023, the US CPI increased by 0.2% compared to the previous month. If so, in the same period last year, CPI increased by 3.2%, lower than the forecast of 3.3% of experts but higher than the level of 3% in June. Meanwhile, producer price index (PPI) decreased. for the 10th month in a row, down 4.4% year-over-year and June's decline was 5.4%.

Overall, the devastation has cooled significantly by 2022 standards, but is still well above the Federal Reserve's (Fed) target. Experts say that the 3% release time cannot stop the Fed from cutting interest rates anytime soon.

Comentarios:

The Federal Reserve cannot afford to cut interest rates as soon as core inflation remains above its 2% target.

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Because the market has just witnessed the consumer price index (CPI) of July and producer prices (PPI) of China both decrease over the same period. This is a signal of deflationary pressure as demand in the world's second-largest economy weakens. Economic weakness, gold will have the opportunity to go up.

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Over the past week, gold has been on a downward trend with the price down 1% in the context of inflationary pressure on the US economy. Currently, gold market participants are still divided on whether the final rate hikes of the US Federal Reserve (Fed) will have more hikes.