Is Gold's Shine Dimming Under the Weight of Inflationary Pressure?
Inflation seems to be a persistent issue, as indicated by the recent US Consumer Price Index (CPI) and Producer Price Index (PPI) reports. Both these reports showed higher-than-expected numbers, suggesting that the increase in wholesale prices is making its way to consumers. The primary culprit for this dramatic rise is the surge in energy costs, notably driven by OPEC+ supply restrictions. What's interesting is that both Crude Oil prices and US Treasury yields are currently on the rise simultaneously, an unusual trend. This situation has pushed Gold to a 10-month low, although it did show some resilience by bouncing back from the $1900 level, which has historically provided support. However, if Gold closes below $1900, it could potentially drop further to its previous support level at $1875. Following the recent PPI data, there's growing speculation that the Federal Reserve might pause its rate hikes during the upcoming September FOMC meeting. According to the CME's FedWa...