Gold Price: XAU/USD Holds below $2000: During the early Asian session on Wednesday, the gold prices of XAU/USD held below $2000 and went down to $1,980. After US inflation numbers came out, the yellow metal returned to where it had been. The study supported the idea that the Federal Reserve (Fed) would have to keep interest rates high for longer in order to reach its goal of 2% inflation.XAU/USD Holds Below $2000 Amidst Anticipation of US PPI and Fed Rate Decision
Gold Price: XAU/USD Holds Below $2000 Amidst Anticipation of US PPI and Fed Rate Decision
As for the US Dollar Index (DXY), it shows how much the USD is worth against a group of currencies that the US trades with other countries. It has been moving back down from 104.30 and is now hovering around 103.80. The rates on 10-year Treasury notes go down from 4.23% to 4.21%, which is a small drop.
The Consumer Price Index (CPI) showed that inflation in the US rose 0.1% month over month in November, which was what the market expected. It was thought that the yearly number would rise from 3.2% in October to 3.1% in November. Also, the Core CPI, which doesn’t include fluctuating prices for things like food and energy, went up by 0.3% month over month and 4.0% year over year, which was what the market expected.
Inflation in the US is still high, and people in the market think that the Federal Reserve will have to keep rates high for longer to keep prices from going up too much. But people in the market will pay attention to the Fed’s meeting on monetary policy and what Chair Jerome Powell says. The CME FedWatch Tool shows that there are 80% chances that the Fed will cut rates in May, even though most people think they will keep rates the same on Wednesday.
— FXStreet News (@FXStreetNews) December 12, 2023
The Chinese government stressed how important industry policy will be next year late Tuesday. The Chinese government will tell financial institutions to give more help to new technologies, going green, small and tiny businesses that serve everyone, and the digital economy. This story let down investors who were hoping for a big stimulus to boost growth in a time of worsened deflation in China, a lack of cash in the real estate market, weak trade data, and a slowing recovery from Covid lockdowns.
Gold Price Forecast: XAU/USD holds below $2,000, all eyes on US PPI, Fed rate decision
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— Mitrade (@MitradeOfficial) December 13, 2023
Before the Fed’s meeting on Wednesday to talk about monetary policy, people in the market will keep an eye on the US Producer Price Index (PPI). Traders will pay attention to what Fed Chair Jerome Powell says after the meeting. If the Fed leaders say the harsh things they are saying, it could make people want to sell gold.