Asian markets mixed as positive sentiment from another record session in the US was offset by wage talks in Tokyo, with early indications in favor of a Bank of Japan pivot. Comex Gold futures holds decline as hotter tan expected US inflation showed that fed battle isn’t over. Investors now look ahead to FOMC meeting next week!
Ravindra Rao, Head Commodity Research, Kotak Securities said, “Comex Gold prices declined more than 1% on Tuesday, March 12, as hotter than expected US inflation reinforced Fed’s cautious approach to cutting interest rates. Data released yesterday showed that the headline CPI unexpectedly rose to 3.2% y/y (0.4% m/m) in February compared with 3.1% in January.
The core CPI eased to a near three-year low of 3.8% y/y in February, but rose 0.4% m/m, topping estimates. Still, market expectation have not been altered much and investors still expect 60% odds of a June rate cut. Now the focus will be on US retail sales data this week and FOMC meeting next week, with the release of fresh quarterly projections and dot plot.”
Comex Gold prices declined more than 1% on Tuesday as hotter than expected US inflation reinforced Fed’s cautious approach to cutting interest rates. Data released yesterday, March 12, showed that the headline CPI unexpectedly rose to 3.2% y/y (0.4% m/m) in February compared with 3.1% in January. Energy costs dropped much less than expected, while prices increased at a softer pace for food, shelter and new vehicles and continued to decline for used cars and trucks.
The core CPI eased to a near three-year low of 3.8% y/y in February, but rose 0.4% m/m, topping estimates. Stronger than anticipated US inflation data and core inflation beating estimates for second month further clouded the outlook for when the Federal Reserve will start cutting interest rates. Still, market expectations of fed funds have not been altered much and investors still expects a June rate cut.
Now the focus will be on US retail sales data this week and FOMC meeting next week, with the release of fresh quarterly projections and dot plot.
Comex Silver prices extended declines on Tuesday, tracking weakness in bullions and positive sentiments in base metals. Industrial metals closed higher as China’s plans to boost exports to clear domestic glut kept prices supported at higher levels, while latest US CPI numbers pushed back early Fed rate cut bets, weighing down on bullions. Silver prices eased in early Asian trading on reports that Country Garden Holdings Co. missed a coupon payment on a Yuan bond for the first time, adding to the woes of the Chinese developer that is now facing a lawsuit seeking its liquidation offshore and highlighting the stress in Chinese property sector.