Forex-novosti i prognoze od 12-11-2023

• Gold price posts a modest recovery around $1,940 on the consolidation of USD.
• The stronger-than-expected CPI data this week might raise the odds that Fed to hike the rate again in December.
• The fear of economic growth in China might drag the gold price lower.
• Gold traders will closely monitor the US inflation data on Tuesday.

Gold price (XAU/USD) trades in positive territory during the early Asian session on Monday. The consolidation of the US Dollar (USD) lends some support to the precious metal. However, the higher US Treasury bond yield might cap gold's upside in the next session. At press time, the gold price is trading around $1,940, up 0.22% on the day.

On Friday, Federal Reserve (Fed) Bank of San Francisco President Mary Daly said she is not ready to say yet whether the central bank is done raising its interest rate cycle to bring inflation back to 2%. While, Fed Chair Jerome Powell stated that if it becomes appropriate to tighten policy further, Fed will not hesitate to do so. Traders will take more cues from the key data this week, including the US Consumer Price Index (CPI). The stronger-than-expected data might raise the odds that Fed to hike the rate again in its December meeting. It's worth noting that rising interest rates raise the opportunity cost of investing in non-yielding assets, implying a negative outlook for precious metals.

Furthermore, concern over economic growth in China might drag the gold price lower as China is the world's largest gold producer and consumer. Last week, the Chinese CPI dropped 0.2% in October from the previous reading of 0%. This week’s Chinese Retail Sales and Industrial Production will be released and these data could offer some hints about China’s economic condition.

The key event will be the US Consumer Price Index (CPI) on Tuesday. The monthly CPI reading is expected to ease to 0.1% in October while the core CPI is estimated to remain unchanged at 0.3%. These events could give a clear direction to the gold price.

Federal Reserve (Fed) Bank of San Francisco President Mary Daly spoke on Friday with CNBC that she is not ready to say yet whether the Fed is done raising its interest rate target to bring inflation back to 2%.

Key quotes

Market reaction

The comments above have little to no impact on the US Dollar. The US Dollar Index (DXY) is trading lower on the day at 105.78, as of writing.

• AUD/USD remains on the defensive above the mid-0.6300s in early Monday.
• The US University of Michigan Consumer Sentiment dropped, but inflation expectations rose in November.
• The RBA Monetary Policy Statement said the nation’s inflation has passed its peak, but it is considerably higher than expected.

The AUD/USD pair remains under selling pressure during the early Asian session on Monday. The concern over economic growth in China weighs on the Australian Dollar (AUD) and the higher US Treasury bond yields lift the US Dollar (USD) higher. The pair currently trades near 0.6355, losing 0.07% on the day.

The preliminary US University of Michigan Consumer Sentiment data for November fell to 60.4 from 63.8 in the previous month, the lowest reading this year. Meanwhile, the 1-year inflation expectations rose to 4.4% from 4.2% and the 5-year rose to 3.2%, its highest reading in 11 years.

The markets see a low chance of the Federal Reserve (Fed) raising interest rates again in its December meeting. According to the CME FedWatch Tools, the odds for rate hikes in December dropped to 14.4%. However, Fed Chair Jerome Powell stated that they will not hesitate to raise rates again if it’s necessary. The key economic data this week, including the US Consumer Price Index (CPI) might offer hints about monetary policy guidance.

On the Aussie front, the Reserve Bank of Australia (RBA) released its Monetary Policy Statement (MPS) on Friday, indicating the nation’s inflation has passed its peak, but it remains considerably high and is proving to be more persistent than expected a few months ago. The RBA will bring inflation back to target, but the upcoming data will determine whether additional monetary policy tightening is required.

Looking ahead, market players will monitor the Australian Westpac Consumer Confidence for November on Tuesday. The US Consumer Price Index (CPI) will be a closely watched event by traders. The monthly CPI figure is expected to ease to 0.1% in October from 0.4% in the previous reading, while the core CPI is estimated to remain at 0.3%.