HomeContributorsFundamental AnalysisSafe-Haven Demand Boosts Gold Ahead of U.S. Inflation Data

Safe-Haven Demand Boosts Gold Ahead of U.S. Inflation Data


The gold price rose slightly towards 1,945 on Monday, bolstered by safe-haven demand as both the U.S. dollar and Treasury yields declined ahead of today’s release of the U.S. inflation data for October.

Possible effects for traders

According to a Reuters survey, economists expect the headline U.S. Consumer Price Index (CPI) to slow down from a 0.4% rise in September to a 0.1% increase in October. The core inflation rate is expected to remain steady at 0.3%. While gold is considered a protection against inflation, rising interest rates increase the opportunity cost of owning the metal.

XAUUSD was declining during Asian and early European trading sessions. Today, traders should focus on the U.S. CPI report at 1:30 p.m. UTC. If inflation exceeds expectations, the chances for another rate hike by year’s end rise, potentially boosting the U.S. dollar, so the short-term bearish trend in gold might continue. Meanwhile, lower-than-expected figures may push XAUUSD towards 1,950.

These trading ideas can only be applied to the intraday trading strategy and remain valid for 24 hours after publication. They are based on historical data and analysis and do not guarantee constant profit. You remain solely responsible for your decisions and the financial risks you take. In case your pending order is not executed within a single trading day, please, do not forget to cancel it.

Featured Analysis

Learn Forex Trading