Posted 14th September 2022

Gold traded above $1,700 despite U.S. inflation above expectations

gold dollar bar

Gold is trading just above the $1,700 mark, after losing over 1% in yesterday’s trading session. Markets are still digesting the U.S. inflation figure after there was unexpected growth in monthly consumer prices. 

Analysts forecasted an 8.1% increase on the yearly data, while the official figure released by the U.S. Bureau of Labor Statistics office was 20 basis points higher at 8.3%.

Thanks to the ease of the pressure on fuel, there has been a slowdown from the 8.5% of July and from the forty-year record of June, when inflation jumped above 9%. But investors are still cautious while talking about the peak of inflation. Moreover, these figures are most likely not enough for the Federal Reserve to decrease the speed of the tightening process.

Currently the key U.S. interest rates are at 2.5%, while markets are now pricing an increase to 3.25% in the next Federal Market Open Committee meeting.

The hawkish expectation for the Fed pulled down stock markets, while the greenback gained. Considering the adverse scenario, gold posted a relatively modest reaction, falling to $1,700 before recovering over the rest of the session.

From a technical point of view, the price is close to some important support zones, between $1,680 and $1,690. A fall below these levels can be seen as a weakness signal, while a recovery above $1,730 will denote strength.

Carlo Alberto De Casa is an external Market Analyst for Kinesis Money, responsible for updating the community with insights and analysis on the gold and silver markets. Carlo provides regular commentary for UK notable outlets including the BBCTelegraphThe IndependentBloombergFX Empire and Reuters.

With a credential background in Economic Finance and International Exchange (MA), his critical analysis on gold and silver’s markets performance is frequently quoted by leading publications, week-on-week.

This publication is for informational purposes only and is not intended to be a solicitation, offering or recommendation of any security, commodity, derivative, investment management service or advisory service and is not commodity trading advice. This publication does not intend to provide investment, tax or legal advice on either a general or specific basis.