Gold Price Forecast: XAU/USD to regather bullish momentum on soft US core CPI data

Gold ended up closing the second straight week in positive territory. September inflation data from the US could trigger a significant market reaction and help the precious metal determine its next direction, FXStreet’s Eren Sengezer reports.

Focus shifts to CPI

“The Consumer Price Index (CPI) is forecast to rise to 8.5% on a yearly basis in September from 8.3% in August. Investors are likely to put more weight on the core figure and a print above 6.5% could fuel another leg higher in yields. On the other hand, an unexpected decline in core inflation should help XAU/USD gather bullish momentum. Nevertheless, the initial market reaction could fade unless it influences the market pricing of the next Feed action in a significant way.” 

“The US Census Bureau will publish the Retail Sales data for September. Ahead of the weekend, the University of Michigan’s Consumer Sentiment Survey for October will be watched closely by market participants, especially the 5-year Consumer Inflation Expectation component, which declined to 2.7% in September from 2.9% in August. Another decline in this data could cause the USD to come under selling pressure and vice versa.”

See – US CPI Preview: Forecasts from 10 major banks, price pressure easing only very slowly