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blog gold rises ahead 13.7.21

Gold Rises Ahead of Inflation Data

During Tuesday morning’s Asian session some U.S. indices were trading higher while awaiting the U.S. Consumer Price Index (CPI) data scheduled for release today. The data will give more clues on inflation and consequently on the direction the Federal Reserve will take in its monetary policy.

Yesterday, the S&P 500 and Nasdaq closed at new highs. This morning, in the Asian session, both indices recorded the same rise: 0.4%. Ten-year US Treasury bonds rose to 1.37%.

Oil, despite tensions among OPEC+ countries, rose for the third consecutive session. According to Bloomberg, the rise could be due to China’s economic slowdown and new Covid 19 outbreaks in multiple regions around the world.

Metals Rise Ahead of Inflation Data

In recent months, US Consumer Price Index data have reflected a gradual rise in inflation that the Federal Reserve, led by Jerone Powell, has described as ‘transitory’.

According to Reuters, investor expectation ahead of the inflation data release has led to weakness in the dollar, which declined 0.1% against its counterparts. Consequently, gold benefited, rising 0.2%.

The yellow metal reached $1,809.81 an ounce. Last month, following a central bank’s policy change, gold suffered its biggest monthly drop since December 2016. The question that remains now is how today’s CPI release and Fed’s direction will affect the safe haven. According to AirGuide’s Michael Langford, gold could range between $1800 and $1820 an ounce next week.

The rest of the metals experienced various movements. Palladium fell 0.3% to $2,848.90, Silver rose 0.2% to $26.22 an ounce while Platinum was also up 0.2% trading at $1,119.32.

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