Gold Price Erases Gains as Market Eyes US CPI Data

The price of gold erased its gains after the US NFP report showed job growth in August almost tripled the consensus estimate, but most of the NFP-driven moves were faded out. The market focus was not on the NFP report, but rather on the upcoming US CPI data, which is currently being watched closely by the Federal Reserve.

Just a day before the NFP report, Fed's Waller mentioned that he would support keeping interest rates unchanged at the upcoming FOMC meeting, but a hot CPI would make him consider a rate hike. This week is all about the US CPI data, and unless we get some surprising breakthrough in US-Iran relations, the price action will likely remain mostly rangebound or slightly negative for gold.

A soft or in-line CPI will likely give gold a boost as Fed's Waller mentioned that he won't consider a rate hike unless we get a hot CPI. Conversely, an upside surprise in core monthly inflation data will likely trigger another selloff in gold on a hawkish repricing.