Gold price (XAU/USD) has revived after a knee-jerk move on Thursday, a result of the United States Consumer Price Index (CPI) report for September showing headline inflation above expectations. The precious metal recovered quickly as traders’ bets for an unchanged interest rate decision by the Federal Reserve (Fed) at its November monetary policy meeting became even more pronounced. This was due to the CPI’s core inflation reading softening in line with expectations. Headline inflation turned out hotter than consensus as higher global oil prices added to the price index. The US Dollar and bond yields also recovered as persistent inflation data lifted the odds of one additional interest rate hike by the Fed in the remainder of 2023. The appeal for the US Dollar improves as global slowdown fears have risen due to deepening Middle East tensions. Meanwhile, investors shift focus to Fed Chair Jerome Powell’s speech, scheduled for next week, which will provide cues about the likely monetary policy action taken at the November 1 meeting.
Gold price recaptured the two-week high at $1,885.00 as the odds for an unchanged interest rate decision by the Fed at November’s monetary policy meeting remained unflinchingly high despite the CPI’s hint of continuing inflationary pressure. The precious metal seems to be stabilizing above the 20-day Exponential Moving Average (EMA), which trades around $1,873.00. The yellow metal is further approaching the 50-day EMA. Momentum oscillators recovered from the oversold zone on Friday.
