What’s wrong with the housing market?
- US inflation report hits gold
- Fewer Fed rate cuts priced into markets
- A loss of major technical support
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.
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.
3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads.
Which stock should you buy in your very next trade?
With valuations skyrocketing in 2024, many investors are uneasy putting more money into stocks. Unsure where to invest next? Get access to our proven portfolios and discover high-potential opportunities.
In 2024 alone, ProPicks AI identified 2 stocks that surged over 150%, 4 additional stocks that leaped over 30%, and 3 more that climbed over 25%. That's an impressive track record.
With portfolios tailored for Dow stocks, S&P stocks, Tech stocks, and Mid Cap stocks, you can explore various wealth-building strategies.
