Strategist: CPI reversal weakens some momentum in gold

On August 15th, Golden data reported that the US July CPI on Wednesday poured cold water on the market’s expectation of a 50 basis point rate cut by the Fed in September, causing Spot gold to fall by 1% intraday. Tai Wong, an independent metal trader in New York, said, ‘The rate cut in September is a sure thing. Current data indicates that the Fed will start raising rates from 25 basis points, which will disappoint the market that favors rate hikes beyond expectations.’ Phillip Streible, Chief Market Strategist at Blue Line Futures, said, ‘Market expectations have now shifted to supporting only a 25 basis point rate cut, which may weaken some of the momentum in the gold market.’ However, Ben Hoff, Head of Commodity Strategy at BNP Paribas, said, ‘We are still in an environment of significantly escalating geopolitical tensions, which is always favorable for gold.’