October 6, 2022

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US CPI stats and the value of the dollar: Five factors that could affect the price of gold in the near future

In the previous week, gold prices hit their highest levels in one month, reaching the crucial barrier of $1,800 an ounce in the spot market, while heightened fears of slowing global economic activity were fueled by weak statistics on industrial activity reported by different regions. .

The recent decline in the dollar index, which fell to nearly 105 before recording a significant recovery and printing the week’s gains, was another major factor contributing to the recent rise in the price of the yellow metal.

Another factor that favored interest in gold as a safe base was the increase in tensions between China and Taiwan on the occasion of the visit of Nancy Pelosi (Speaker of the US House of Representatives) to Taiwan.

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Here are the top five factors that may affect the price of gold in the coming week.

  1. US CPI data “The US CPI and core CPI statistics for July, which will reveal the trend of economic inflation, will be an important catalyst for the gold price. In the US, the annual inflation rate rose to 9.1% in June, a record high new.
  2. Dollar Index “The movement of the dollar index will also be monitored. The dollar is expected to establish a base at the level of 105 and remain strong, at least for the foreseeable future, which could put a significant burden on gold prices.

On the other hand, if the dollar index breaks through the critical level of 105, gold will get a boost to continue rising,” said Suganda Sachdeva.

  1. Fed speech: “Next week we have conferences of two senior Federal Reserve officials that will shed light on the future direction of monetary policy in the United States,” said the Religare expert.
  2. Taiwan-US Relations: “After the Russo-Ukrainian War, US-China geopolitical tensions may increase demand for gold.”
  3. UK and Eurozone industrial production, Chinese CPI/PPI data and OPEC monthly report should keep gold prices volatile throughout the week and provide proper guidance for gold.
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