On February 12, 2025, the U.S. CPI data came in at 3.9% YoY, reflecting persistent inflation pressures. Meanwhile, Fed Chair Jerome Powell’s testimony the day before maintained a hawkish stance, emphasizing the need for higher interest rates for longer to combat inflation. These developments created downward pressure on gold prices.
Today’s given signal : https://t.me/calendarsignal/16968
Why Higher CPI and a Hawkish Fed Lead to a Fall in Gold Prices?
- Higher CPI Increases Rate Hike Expectations
- When inflation remains high, the Federal Reserve is likely to delay rate cuts or even raise interest rates.
- Example: A 3.9% CPI indicates that inflation is still above the Fed’s 2% target, meaning the Fed might tighten monetary policy further.
- Stronger U.S. Dollar & Rising Treasury Yields
- Higher interest rate expectations strengthen the U.S. dollar (DXY +0.8%) and push 10-year Treasury yields to 4.9%, making gold less attractive.
- A stronger dollar makes gold expensive for foreign investors, leading to reduced demand and falling gold prices.
- Market Sentiment Shifts Away from Safe-Haven Assets
- Investors shift capital from gold to yield-generating assets like bonds and equities when interest rates rise.
Higher-than-expected CPI → Bearish for gold, bullish for USD.
Lower-than-expected CPI → Bullish for gold, bearish for USD.
CPI in line with forecasts → Minimal market impact.
Previous released data results :
On last CPI data (15-1-2025) we predicted higher data, & as per that we suggest to SELL XAUUSD & as a result, we made a profit of 41 points according to the signal we gave.
Check the previous blog : https://blog.forextrade1.co/gold-prices-expected-to-drop-following-higher-us-cpi-data-january-15-2025/
Check last given signal : https://t.me/calendarsignal/16616
Performance : https://t.me/calendarsignal/16629
On last U.S. Fed Chair Powell Testifies (11-2-2025) we predicted hawkish tone by Powell, & as per that we suggest to SELL XAUUSD & as a result, we made a profit of 44 points according to the signal we gave.
Check last given signal : https://t.me/calendarsignal/16952
Performance : https://t.me/calendarsignal/16963
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