Gold Slips as Inflation Keeps Calm (Oops, Already Calm)
Gold’s Tiny Drops & Big Numbers
At 12:30 p.m. GMT, gold dipped 0.3%, shedding about $2,510 per ounce. The metal’s dip felt like a gentle shrug in a market bustling with numbers.
Why CPI With A Calm Face Still Triggered a Gold Dip
- Annual CPI: 2.5% YoY – slowest in over three years.
- Monthly CPI: 0.2% MoM – exactly what everybody already priced in.
- Core CPI: 0.3% MoM – a bit faster, thanks to lasagna‑like service prices that kept rising.
Even with those numbers, market folks were already preaching the “Fed is going to cut rates” gospel, so gold just took a breather for profit‑taking.
Fed’s Mischief: Rate Cuts on the Horizon
According to the trusty CME FedWatch Tool, the probability of a 25‑bp cut next week is a solid 85%. By year’s end, a whopping 95% chance of sucking up to 1.25 % in cuts.
Bond Yields: Gold’s Quiet Pressure Cooker
Short and long‑term Treasury yields bounced back. Their rebound can squeeze gold’s shoulders — think of it as a gentle bell‑hop that nudges the metal toward lower prices.
Market’s Twist: Cuts Not Saved by the Recession Fairy
- The market trimmed the cut probability by half a percentage point over the week.
- This tweak hints the Fed’s future moves will tackle falling inflation rather than rescue the economy from a recession.
- When the Fed rabbits ran the rapid‑cut game, gold rallied because uncertainty whispers sweet nothings. Now that whisper is fading, gold feels the chill even with labor numbers looking a bit grim.
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