Gold prices declined this week following the release of US inflation data that exceeded market expectations. The Consumer Price Index rose 3.7% annually, surpassing the 3.6% forecast. Producer prices increased by 6.3%, marking the largest gain since 2022, while import prices grew by 1.1% against a 0.8% consensus.
Despite the inflation data, gold prices dropped approximately 0.6% this week and have fallen by more than 2% over the past month. Market participants reacted to the reports by selling gold, anticipating that the Federal Reserve will implement further interest rate hikes. CME FedWatch data suggests a 90% probability of a rate increase in December.
Economist Peter Schiff maintains that the current price of $4,145 per ounce is a buying opportunity, arguing that the Federal Reserve has failed to control inflation. Conversely, analysts at Bank of America project that gold will trade below $4,000 by the end of the year. Earlier this month, gold and silver markets saw a temporary loss of $400 billion in paper value.
