Commenting on the Gold Outlook Renisha Chainani, Head Research – Augmont – Gold For All said that The gold price has recovered from $2500 after the critical US CPI report prompted investors to lower their expectations of a greater, 50-basis-point interest rate decrease by the Federal Reserve next week. According to the US Bureau of Labor Statistics, the headline CPI increased 0.2% in August, however, the annual rate fell more than expected, from 2.9% to 2.5%, the weakest increase since February 2021.
Chainani also added that according to the CME Group’s FedWatch tool, the markets are now pricing in an 87% likelihood of a 25 basis point rate drop at the next FOMC policy meeting on September 17-18, compared to 71% before the US CPI data. US Treasury bond rates are rising as the chances of a more aggressive policy easing by the US central bank decrease. If Gold breaks its previous high of $2530, we could see new highs of $2550 (~Rs 73000) and $2600 (~Rs 75000) in the short term.
