Gold falls below $2,000 after resilient display this year
NEW YORK (February 13) US inflation data finally took its toll on gold which, after holding strong above $2,000 this year, finally crumbled under the pressure of higher rates.
How much worse it gets for the yellow metal will ultimately depend on how bad the data gets but, under the circumstances, we’re certainly back in a “good news is bad news” scenario ahead of the retail sales data.
The fairytale scenario of a strong economy, low inflation, and rate cuts now looks a step too far.
US inflation rose 0.3% last month and 3.1% compared to a year earlier. That’s still well above the Federal Reserve’s 2% target and the report has almost erased any possibility of a March rate cut in the markets.
Gold hits a two-month low after the CPI report
Gold fell heavily after the data as traders finally appeared to accept that rate cuts may not come as soon and as fast this year as previously assumed.
Gold Daily
Source – OANDA
The break below $2,000 may be a big psychological blow after such a long period of resilience. The next big test could fall around $1,973 where the December low aligns with the 200/233-day simple moving average band.
MarketPulse
