XAU/USD to drop if US CPI points to persistently high price pressure – Commerzbank

Gold was able to gain something of a foothold again at the start of the week. Economists at Commerzbank analyze the yellow metal’s outlook.

Gold likely to tread water ahead of US inflation data

Gold’s recovery potential is likely to remain limited ahead of the US inflation data due to be published today.

If the figures point to persistently high price pressure, the market is likely to ratchet up its interest rate expectations, which would exert renewed pressure on Gold.

We see the risk of a higher-than-expected figure for the core rate in particular. This could be as much as 0.4% (month-on-month).

At the same time, we believe that the obstacle to any further rate hike is high given that the first signs of weakness in the economy are apparent. We therefore remain optimistic about Gold in the medium term.

See – US CPI Preview: Forecasts from seven major banks, still to the high side of the Fed’s target