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Gold Futures Rise as US Dollar Weakens Ahead of August Consumer Price Index (CPI)

gold futuresIt closed higher on Monday (11th), continuing last Friday’s gains. The main reason was that the US dollar fell before the key August Consumer Price Index (CPI), and the overall wait-and-see sentiment was strong.

New York for December deliverygold futuresIt closed up $4.50, or 0.2%, at $1,947.10 an ounce.

ICE dollar index (DXY) fell 0.5% on Monday, paring month-to-date gains to 0.9%, as Bank of Japan Governor Kazuo Ueda suggested last week that the long-running negative interest rate policy may be coming to an end.JPYJinyang.

When the U.S. dollar weakens, it means that U.S. dollar-denominatedgoldBecoming cheaper for overseas buyers is good for prices.But as U.S. bond yields rose on Monday,goldThe rally was capped becausegoldIt does not yield interest itself. When the yield rate rises, holding itgoldThe opportunity cost also increases.

Traders’ focus is on Wednesday’s August CPI, which is a key data ahead of the Federal Reserve’s (Fed) decision in September.

Edward Moya, senior market analyst at OANDA, said: “goldThe U.S. dollar started the week on a good note due to some weakness in the U.S. dollar, but there is still some pressure in the short term as the market still expects more rate hikes this year.I don’t think investors have gotten the green light yet to become more aggressive in buyinggoldwhen. “

According to the CME FedWatch tool, traders estimate that there is a 93% chance of keeping interest rates unchanged at the Fed’s September 19-20 meeting, but there is still a 41% chance of raising interest rates in November.

Ahead of the crucial meeting, Fed policymakers have repeatedly signaled they are not eager to raise rates, but few are ready to declare victory over inflation.

Philip Steible, chief market strategist at Blue Line Futures, said,gold futuresTo break $2,000 per ounce, we need to see the Fed become less hawkish anddollar indexand U.S. bond yields both fell.

Comex Metals Commodities Trading for December DeliverySilver futuresIt rose 21 cents, or 0.9%, to $23.38 an ounce. Delivered in DecemberCopper futuresrose 2.4% to $3.81 per pound. Delivered in OctoberPlatinum FuturesIt rose 0.8% to $902.30 an ounce. Delivered in DecemberPalladium Futuresrose 2.3% to close at $1,219.20 an ounce.
2023-09-11 22:36:04
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