Investors are reevaluating their expectations of a more hawkish stance from the US Federal Reserve (Fed) as a result of surprisingly high Consumer Price Index (CPI) data. According to the Labor Department, the CPI in the United States increased by 0.4% last month, following a 0.3% rise in August. In terms of annual inflation, September's CPI remained steady at 3.7%, matching August's level and surpassing estimates of a 3.6% increase.
The release of this US inflation data has reinforced the Fed's narrative that interest rates will remain higher for an extended period of time, leading to an uptick in both the value of the US Dollar and yields on US Treasury bonds after they had reached two-week lows. Consequently, gold prices experienced a sharp reversal from their recent peak above $1,880 per ounce and dipped below $1,870 per ounce due to renewed confidence in more aggressive monetary policy measures by the Fed.
In summary, these developments have impacted investor sentiment towards riskier assets negatively while benefiting safe-haven assets like the US Dollar which saw an upward correction alongside rising treasury bond yields
The release of this US inflation data has reinforced the Fed's narrative that interest rates will remain higher for an extended period of time, leading to an uptick in both the value of the US Dollar and yields on US Treasury bonds after they had reached two-week lows. Consequently, gold prices experienced a sharp reversal from their recent peak above $1,880 per ounce and dipped below $1,870 per ounce due to renewed confidence in more aggressive monetary policy measures by the Fed.
In summary, these developments have impacted investor sentiment towards riskier assets negatively while benefiting safe-haven assets like the US Dollar which saw an upward correction alongside rising treasury bond yields
