Books – Islam Saeed Thursday, September 14, 2023 12:00 AM
With the release of the US inflation data for August, which the markets are greatly awaiting,… gold prices The global stock market is declining significantly because these data carry signals of the Federal Reserve’s interest rates during the coming period.
The consumer price index showed an increase during the month of August by 0.6%, in line with expectations, but higher than the previous reading, which was high by 0.2%. The index rose at the annual level by 3.7%, higher than the previous reading of 3.2% and expectations of 3.6%.
As for the core index, which excludes variable readings such as fuel and food, it showed an increase of 0.3%, higher than expectations and the previous reading of 0.2%, while at the annual level it declined to 4.3%, matching expectations from the previous reading of 4.7%.
The main reason behind the rise in inflation in August was fuel prices, in light of the continued rise in crude oil prices since last June, which increases pressure on inflation rates and thus may push the Federal Bank to adhere to the policy of monetary tightening until the end of the year, according to Gold Billion’s analytical view on US inflation index.
Market expectations place a 96% probability that the Federal Reserve will resort to stabilizing interest rates during its next meeting without change, and this probability has increased from 93% before the inflation data, while the probability of raising interest rates by 25 basis points at the November meeting decreased to 39.2% after the… It was 41% before inflation figures.
Inflation data revealed that inflation is still holding steady in the United States despite the interest rate hike cycle that began in March 2022, which may prompt the US Federal Reserve to adhere to the fight against inflation and continue the monetary tightening policy until the end of the year, even if it stops raising interest rates at the meeting. September, it may indicate the possibility of raising rates at the November meeting or keeping them at high levels for a longer period than expected.
The immediate impact of the data pushed global gold prices to record the lowest level in two weeks at $1,905 per ounce, before recovering and trading at the time of writing at $1,914 per ounce.
The reason for the rise in gold prices despite the data having a negative impact on gold, is that the data had already been priced in the gold markets, and even the US dollar witnessed an instantaneous rise at the time of the data release, and the dollar index recorded the highest level at 104.96 before returning to decline and trading. Currently at 104.58.
As for the price of gold in the local market, the impact of inflation data on it was largely weak, as the price of gold continued to trade between the levels of 2200 – 2195 pounds per gram of 21 carat, because the price of gold in the world did not move in one stable direction and also witnessed fluctuations.
2023-09-13 21:00:00
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