Gold price continues to hold strong near $2,045 despite the USD rebounding. The US Nonfarm Payrolls (NFP) data for December surpassed expectations, with an increase of 216K compared to 173K in the previous period. This has led to an increase in demand for the US Dollar. However, the focus will now shift to the US Consumer Price Index (CPI) data scheduled for Thursday, which is expected to have a significant impact on the market.
The US Dollar Index (DXY) has also rebounded from its late December low to 102.50, rising 0.04% on the day. The upcoming US inflation data will be crucial, with the headline CPI expected to show a 3.2% year-over-year increase and the Core CPI anticipated to ease to 3.8% from the previous 4.0%. A strong inflation report could boost the USD and potentially weigh on the price of gold.
After the better-than-expected NFP data, traders have reduced their expectations for interest rate cuts from the Federal Reserve, with the Fed funds futures markets pricing in a 56% chance of a rate cut in March.
Looking ahead, the focus will be on the US inflation data and the speeches by several Fed officials, including Bostic, Barr, Williams, and Kashkari. Additionally, the Chinese CPI and US Producer Price Index for December will also be released on Friday. All of these factors combined will continue to influence the movement of the gold price and the USD in the coming days.
