All Eyes On China And U.S Inflation Data For Clues On Gold’s Next Big Move – What’s Next?

Phil Carr
Published: Oct 25, 2023, 20:40 GMT+00:00

As the Israel-Hamas conflict continues to brew in the background – traders have turned their attention to new stimulus measures from China and September’s U.S inflation figures for clues on the precious metals next big move.

Gold bullion, FX Empire

In this article:

China’s Unprecedented Stimulus Sparks Economic Optimism and Influences Gold Prices

Gold prices were back on the rise on Wednesday after The People’s Bank of China pumped a record amount of short-term stimulus into its financial system to boost the country’s faltering economy.

The central bank has now added a whopping total of $268 billion in short-term stimulus into the world’s second-biggest economy over the past week alone. This is one of the largest cash injections in the history of The People’s Bank of China.

On Friday, China’s central bank injected $100.2 billion into its financial system – a move which sent Gold prices skyrocketing to a three-month high within striking distance of $2,000 an ounce.

This bold policy move by the PBOC to rejuvenate its economy is a very rare occurrence. The last time China rolled out similar fiscal policy measures was back in 2008 and during the Asian Financial Crisis in the late 1990s.

According to economists, while the U.S is doubling down on restrictive monetary policy, China is now preparing to do the exact opposite. Recent stimulus measures seen from China over the past week could just be the beginning!

Market Awaits High-Stakes U.S. Inflation Data as Fed’s Next Move Remains Uncertain

On the topic of monetary policy, U.S Inflation data is anticipated to be the next big market-moving event that traders will not want to miss this week.

Following a recent string of mixed economic readings coming after the Fed raised its benchmark interest rate to the highest level in more than 22 years – an interesting debate is raging as to what the U.S Central Bank should do next; skip, pause or hike interest rates again when policymakers reconvene on October 31 – November 1.

The answer to that question may come from the Fed’s preferred measure of inflation – The Personal Consumption Expenditures Price Index, due for release on Friday.

According to estimates from the Cleveland Federal Reserve Bank, the high-stakes U.S Inflation report is expected to show that price pressures within the economy accelerated again in September, underscoring the Fed’s efforts to bring inflation down to its 2% target.

Extraordinary times create extraordinary opportunities and right now, these markets are a trader’s paradise. Regardless of whether the data meets, beats, or misses expectations – the outcome is guaranteed to be a license to print money, which traders will not want to miss out on!

Gold Price Forecast

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About the Author

Phil Carrcontributor

Phil Carr is co-founder and the Head of Trading at The Gold & Silver Club, an international Commodities Trading, Research and Data-Intelligence firm.

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