Gold trading reminder: US inflation data is in line with expectations, the rebound in gold prices is blocked, waiting for the Federal Reserve's decision

On Tuesday (December 12), the rebound in gold prices was hindered. Earlier, spot gold rallied around $1996, but after the US inflation data in November met analysts' expectations, the benchmark yield of the US 10-year Treasury bond began to rise, causing gold prices to give up their gains.

(Spot gold trend chart)

Spot gold closed at $1979.26 an ounce on Tuesday, down 0.13%.

Gold prices gave back gains after the release of US CPI data. COMEX gold futures were basically flat at $1993.2 an ounce; COMEX silver futures fell 0.2% to $23.016 an ounce; NYMEX platinum futures rose 1.7% to $931 an ounce; NYMEX palladium futures rose 1.8% to $982.3 an ounce.

[Market News Analysis]

The US Bureau of Labor Statistics (BLS) revealed that the deflationary process in the United States continues, with headline inflation at 3.1%, down from 3.2% in October, but underlying inflation remained at 4% in the 12 months to November. Monthly data were mixed, with CPI at 0.1%, beating expectations by 0%; core CPI at 0.3%, in line with expectations but higher than October.

The release of the data supported the price of gold to a daily high, but the price of gold gave up gains and fell below the $1,980 an ounce mark, dragged down by a recovery in US Treasury yields. Although the dollar index remains weak, gold has not yet recovered from its recent decline.

Gold tried to rebound and hit highs around $1,996 an ounce on Tuesday, and sellers took control after the U.S. CPI was released. The rise in monthly inflation data means the Federal Reserve is unlikely to commit to a rate cut at tomorrow's meeting. That led to a temporary rise in U.S. Treasury yields and pushed gold back into key support territory.

Zain Vawda, analyst at Dailyfx, predicted that "with geopolitical tensions remaining high, gold is likely to continue to be supported and attract buyers in the event of a sharp decline. The allure of the precious metal remains high, and with a rate cut inevitable sometime in 2024, gold prices are likely to remain above the $1,800 an ounce mark for the foreseeable future."

The Fed is widely expected to keep its current base rate of 5.25% -5.5% unchanged, with a focus on next year's interest rate forecasts and Fed Chairperson Jerome Powell's press conference. Investors will look for dovish hints in Powell's remarks to revive hopes of a rate cut in early 2024, which will give gold prices a fresh boost.

[Wednesday trading day focuses on financial data and events (Beijing time) ]

① 15:00 UK October three-month GDP monthly rate, UK October quarterly adjusted merchandise trade account, UK October industrial and manufacturing output monthly rate

② 18:00 Monthly rate of industrial output in the euro area in October

③ 21:30 US PPI annual and monthly rates in November

④ 23:30 EIA crude oil inventories in the week from the United States to December 8, EIA Cushing crude oil inventories in the week from the United States to December 8, and EIA strategic petroleum reserve inventories in the week from the United States to December 8

⑤ The next day at 03:00, the Federal Reserve announced a summary of interest rate decisions and economic expectations

The next day at 03:30, Federal Reserve Chairperson Powell held a press conference