Weaker than expected CPI reported this Tuesday has been a “perfect storm” for gold, as dollar and treasury yields dipped, further boasting hopes that the Fed won’t hike interest rates in the near future.
Gold is consolidating with bulls holding the grip as it stays about $1,900/oz this week. That level has proven to be an important floor.
Open interests increased by 13,828 lots of 1.4mil ounces from 3 trading sessions this week, fueling the support.
Rumors of a Fed pause or a rate cut will benefit precious metals since it increases the attractiveness of non-interest bearing assets.