Gold prices strengthened again after slipping for a while due to the strengthening of the US Dollar. Spot gold prices fell by 0.2% to $1,927.35, but gold futures prices rose by 0.3% to $1,922.30.
In the Tuesday (January 24/January) evening trading session, XAU/USD edged up b6 0.23% to $1,935.07. This was in a flat trend since the rapid surge on January 19.
The strengthening of America’s Treasury bond yields also lifted the Dollar Index. As a result, the price of gold reaped little pressure in the market so far.
The latest update on the condition of United States inflation is back in the spotlight. The S&P Global survey shows that the upward impulse in America’s inflation is still higher than the previous spring.
Inflation has Not Really Recovered
Based on the situation occurred lately, hot inflation has not really recovered, even though the Fed has tightened their monetary aggressively. Nevertheless, Ryan McKay as an analyst at TD Securities gave his opinion.
He said that gold prices will still be quite strong in a short term period. Market expectations of a more dovish Fed supported gold buying interest and were little affected by the survey.
In next week's monetary policy announcement, 96% of traders expect the Federal Reserve to increase their interest rates by only 25 basis points. In line with McKay, David Meger of High Ridge Futures shared his thought too.
He said that everything is in line with expectations of a decline in inflation. That is why; the Fed has not too many reasons to raise interest rates by a high amount.
Market Focused on the End of a Cycle
The market is focused on clues about the end of the rate hike cycle at the upcoming FOMC meeting. Technically, gold's support level is currently at $1,896.
That level is still quite promising strengthening even though it is lower than last week. Gold prices are just waiting to gain further momentum once next week's central bank meeting is over.
This was said by Michael Hewson, a chief analyst at CMC Markets. Further comments from Fed Governor Christopher Waller late last week supported a follow-up move to drop to 25 basis points (bps).
Furthermore, those have added to the narrative of support for gold and a weaker United States dollar. Market participants seem want to wait and see for a further updates.
Gold Safe Haven Made a Slight Increase
Safe haven gold again recorded a slight gain at the close of trading on Tuesday (24/January) yesterday. Gold is observed to move flat because there are no important catalysts that can move the price significantly.
Elsewhere, The New Zealand Bureau of Statistics only releases quarterly CPI data in quarterly (q/q) and quarter per year (q/y) formats. This CPI data measures the inflation rate.
Besides that, it is always considered by the RBNZ as a consideration in determining interest rates. Unlike major currency countries that release CPI data on a monthly basis, the Australian Bureau of Statistics releases quarterly total CPI data in quarterly.
It was also released quarter per year (q/y) or annual inflation formats. Although relatively late compared to other major currencies, the CPI is one of the important indicators.
CPI still Becomes an Essential Data
CPI becomes an aspect the RBA pays great attention to as a consideration in determining interest rates. This indicator was released by the IFO or Information and Forschung.
It is an economic research institute in Munich that is the largest and most important think-tanks for the German economy in particular and the European region in general.
The index was created by conducting a survey of around 7000 companies and businesses in Germany regarding current economic conditions and forecasts for the next 6 months (future expectations).
IFO business sentiment data is an early indicator of spending on new investment (expansion) and labor recruitment so that it will have an impact on growth.
