US Inflation Cools, Bitcoin and Gold Prices Soar

The US inflation rate cooled to 3.4% in August, according to data released on Wednesday. This is below the forecasted 3.7%, and it had a significant impact on both Bitcoin and gold prices.

Bitcoin topped $85,000 within minutes of the new US inflation data, while gold jumped in a straight line, ending a week-long downtrend. The hourly charts for both assets show a clear increase after the release of the US inflation numbers.

The Fed's preferred price gauge, the personal consumption expenditures (PCE) price index, measures what Americans pay for goods and services. A core PCE reading, which strips out volatile food and energy prices, rose 3.0%, below the 3.3% consensus.

Traders had braced for a hotter print, with a 72.5% chance of an October hike in interest rates before the data was released. However, the cooler inflation reading may chip away at the case for the next rate increase.