Following the release of the US inflation figures, the price of gold briefly rose to $1,930, but then fell back to $1,915. Commerzbank economists analyze the outlook for the XAU/USD.
Gold faces continued headwinds
The month-on-month rates of change indicate that the inflation rate is approaching the Fed’s target number, pointing to an end to the rate hike cycle. That being said, the US real interest rate is already significantly positive using market-based inflation expectations, which is bad news for gold.
Gold is also facing a headwind from continued ETF selling. For outflows to cease, the rate hike expectations still harbored in the market must fade and give way to rate cut expectations. We expect this to happen in the fourth quarter.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
