Bullion Player Prithviraj Kothari, Managing Director of RiddiSiddhi Bullions Limited (RSBL) viewed that, on the Valentine’s day-“Yesterday, US released CPI inflation data, which fell to 3.1% YoY, down from 3.4% the previous month and the core CPI number, which came in at 3.9%.
Following this data release, US Treasury yields edged higher, with the 10-year yield reaching 4.32% and the 2-year rate rising to 4.654%, the largest one-day increase in the last 9 months. After the positive US CPI report, traders in financial markets pushed back their forecasts for interest rate cuts to June from May.
Inflation is dropping, but not fast enough for Fed policymakers to start lowering interest rates soon, which is pressurizing bullion prices. Gold prices are trading on the lower edge of the range around $2000 (Rs 61500), if prices break this range, immediate support would be $1980 (Rs 61000) in the short-term.”
Another Commodity Savvy, Ravindra Rao, Head – Commodity Research at Kotak Securities said, “Comex Gold prices declined for the fifth day in a row as hawkish comments from Fed officials amid the backdrop of upbeat economic data and hotter than anticipated inflation numbers improved the conviction that rates might stay higher for longer and the officials are not in a hurry to cut rates.
Federal Reserve Vice Chair for Supervision Michael Barr said the US central bank needs to see more data indicating inflation is heading back to 2% before it begins lowering interest rates. According to CME FedWatch tool, investors are now expecting only 37% odds of a quarter point Fed rate cut in May 2024 FOMC meeting. Today, US retail sales data, weekly jobless claims and industrial production data will be in focus along with speeches from Fed officials.”