Discover what's next for the gold market!
The gold market is back in the spotlight for global investors this week. On Friday (August 16), spot gold prices jumped more than $50 to close above the $2,500 mark, hitting a record high.
This price surge is not just a jump in numbers, but a combination of market sentiment, macroeconomic data, geopolitical tensions, and monetary policy expectations.
At the start of the week, gold prices rose on the back of a pullback in U.S. Treasury yields and heightened geopolitical tensions. The Israeli Defense minister's statement, which foreshadowed possible military action in the Middle East, added weight to gold's safe-haven properties. However, with the release of the producer price index (PPI) and consumer price index (CPI) in the United States in July, the market's expectation of the Federal Reserve's interest rate cut has been adjusted, and the gold price has experienced a brief consolidation.
The July CPI data released by the Bureau of Labor Statistics (BLS) shows that the inflation rate has declined, but the increase in the core CPI remains firm. The release of the data dampened market expectations of a 50 basis point rate cut by the Federal Reserve in September, and gold gave up some of its gains. However, the gold market came under pressure after more upbeat macroeconomic data released on Thursday further reinforced expectations of a 25 basis point rate cut by the Federal Reserve in September.
Next week's Fed meeting minutes and Powell's speech at the Jackson Hole Symposium will be key factors affecting gold prices.
This price surge is not just a jump in numbers, but a combination of market sentiment, macroeconomic data, geopolitical tensions, and monetary policy expectations.
At the start of the week, gold prices rose on the back of a pullback in U.S. Treasury yields and heightened geopolitical tensions. The Israeli Defense minister's statement, which foreshadowed possible military action in the Middle East, added weight to gold's safe-haven properties. However, with the release of the producer price index (PPI) and consumer price index (CPI) in the United States in July, the market's expectation of the Federal Reserve's interest rate cut has been adjusted, and the gold price has experienced a brief consolidation.
The July CPI data released by the Bureau of Labor Statistics (BLS) shows that the inflation rate has declined, but the increase in the core CPI remains firm. The release of the data dampened market expectations of a 50 basis point rate cut by the Federal Reserve in September, and gold gave up some of its gains. However, the gold market came under pressure after more upbeat macroeconomic data released on Thursday further reinforced expectations of a 25 basis point rate cut by the Federal Reserve in September.
Next week's Fed meeting minutes and Powell's speech at the Jackson Hole Symposium will be key factors affecting gold prices.
Not
The probability that the Fed will cut rates by 25 basis points in September is 72.5 percent and the probability of a 50 basis point cut is 27.5 percent. The probability of a cumulative 50 basis point rate cut by the Fed through November is 56.3%, the probability of a cumulative 75 basis point rate cut is 37.6%, and the probability of a cumulative 100 basis point rate cut is 6.2%.
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