Gold’s Latest Tiny Hiccup
Yesterday, the price of gold (XAU/USD) took a little tumble — it skidded right down to the weekly low of about $2,155 before dusting off on Friday’s opening at $2,165.25. Don’t be alarmed; it was all sparked by a surprisingly high U.S. Producer Price Index (PPI) that made inflation look stubbornly stick‑to‑its‑apostle.
Why the Market Squeezed Gold
- Higher PPI → markets think inflation is still hanging around.
- Fed sees no instant reason to cut rates, which lets Treasury yields climb.
- Rising yields and a stronger U.S. dollar chomped on gold’s liquidity (remember, gold don’t pay a dividend).
So even though the gold price gave a little dip, it bossed itself back above $2,150 because traders still believe that rate cuts could start in June.
What’s Next on the Calendar?
The focus is now on the upcoming Federal Open Market Committee (FOMC) meeting next week. Investors want to see if the Fed will stay “less dovish” or lean toward easing.
Other Market Movers to Watch
- U.S. stocks showed a bit of a wobble with noticeable losses.
- Retail sales data still praise the U.S. economy’s resilience.
- Initial jobless claims fell below expectations, giving a slight boost.
All of this nudges gold lower, especially as the 10‑year Treasury yield advanced to 4.29% (up from 4.19%) and the Dollar Index (DXY) ticked up 0.54% to 103.33.
Fed’s Latest Words
Jerome Powell told Congress last week that inflation seems to be easing, but still stressed that any policy loosening in 2024 would hinge on stable data rolling in. He highlighted that a late‑2024 easing is possible only if inflation stays on a steady down‑trend toward the 2% target.
The next meeting is slated for March 19‑20, and that’s where investors will put the final price on everything.
