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Daily Wrap Up 14 September 2021

14 Sep 2021 07:31 PM

Gold edge higher despite inflation going lower

Gold prices rose significantly during today's trading, following a slower-than-expected rise in inflation figures in the United States, which led the markets to believe that the Fed may wait more before talking about the schedule to reduce its bond-buying program while stressing that the rise in inflation is transitory. Gold rose strongly after the reading breaching the $1,800 an ounce and reached its highest level since September 7, at $1,808.55.

Core CPI rose at the slowest pace in 6 months in August, indicating that inflation has already reached its peak in the previous readings, although it remains above the fed target levels due to ongoing supply constraints. The monthly core CPI reading came at 0.1% for August, while the annual reading came at 4%, compared to the 4.3% expected

The Federal Open Market Committee is scheduled to meet from September 21-22, and its decisions will be crucial to the movements of the US dollar and the precious metal significantly.

In the currency world, the pound almost reached a 5-week high against the US dollar and reached a 3-week high against the euro, following strong UK labor market data which showed total headcounts rose to pre-pandemic levels.

The Office for National Statistics noted that UK companies reported more than one million job vacancies in August, its highest level ever, and the unemployment rate fell to 4.6%. The data confirms the continued recovery story in the British labor market

As for Oil prices, the black gold hit 6-week highs with a new threat from a tropical storm in Texas and Louisiana. Moreover, the International Energy Agency forecasts a significant rebound in demand for the rest of 2021.

Brent crude contracts rose above the levels of $74, recording their highest levels during today's trading, the WTI continued trading near its highest levels since early August for the third consecutive session above $70 per barrel, after touching the $71 mark,

Tomorrow, markets will monitor inflation figures in several major economies, led by the United Kingdom and Canada.

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