Urgent: Gold is at its highest level in 6 weeks thanks to inflation.. and this is what stops the train

Urgent: Gold is at its highest level in 6 weeks thanks to inflation.. and this is what stops the train

The gains of the safe haven expanded during these moments of trading, today, Tuesday, amid inflamed concerns about inflation data to be released tomorrow, Wednesday, for gold to succeed in adding more dollars to the price of an ounce.

Tomorrow, financial markets are awaiting CPI data that will determine the Fed’s direction during the next meeting in September, following the employment data that came in the highest expectations to completely dispel recession fears.

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gold now

Gold prices jumped a few moments ago to levels near 1817 dollars an ounce, before reducing some of its gains to levels near 1815 dollars an ounce, an increase of 0.6%.

Gold is trading during trading today, Tuesday, between levels of $ 1817 as a top, and levels of $ 1799.4 as a bottom, and gold is trading near its highest levels since the end of June 2022.

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Gold prices rose on Monday, supported by the decline in the dollar and US Treasury yields, amid expectations that the pace of interest increases by the Federal Reserve will ease as inflation expectations decline.

Gold contracts rose by the end of trading on Monday by 0.8%, or $14, to reach $1805.20 an ounce.

On the other hand, the US dollar index is declining against a basket of major currencies during today’s trading, in the range of 0.4%, near the levels of 106 points, while the yield on the US Treasury bonds for 10 years recorded levels of 2.8%.

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Inflation fears

“Investors understand that both the United States and the global economy face significant challenges,” said Clifford Bennett, chief economist at ACI Securities.

Clifford Bennett added, but the focus will be on the question of how long the price hike will continue, which is a burden on the market.

Any sudden weakness in US inflation data could be the catalyst for a massive rally in gold prices, said Acy Securities’ chief economist.

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The New York Federal Reserve’s July survey showed inflation expectations for the next year fell to 6.2% from 6.8% expected in June, and expectations for the next three years fell to 3.2% from 3.6% in June.

Goldman Sachs (NYSE:GS) said US inflation is expected to ease over the coming months, but the stock market may not benefit from this development.

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The only threat

The only threat to gold’s gains is Fed officials’ rush to ensure that the bank will spare no effort to tackle inflation, which is at its highest level in more than 40 years, and the tightening voices were heard last Friday night following the release of positive jobs data.

Goldman Sachs says market expectations of the next rate hike by the Federal Reserve have risen after the strong employment data.

The bank concluded that the Fed has more progress than we thought before today, maintaining its forecast for a 50bp rate hike at the upcoming FOMC meeting on September 20-21.

The Fed rate gauge shows that the market is now pricing in a 52% probability that the Fed will raise rates by 0.75%, up from 19% before the non-farm payrolls report.

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