Daily Digest Market Movers: Gold price is underpinned by 50-bps Fed rate cut bets and geopolitical tensions
- Rising bets for a larger interest rate cut by the Federal Reserve, along with geopolitical risks, lift the Gold price to a fresh all-time high on Friday and confirm a bullish breakout through a multi-week-old trading range.
- The US Bureau of Labor Statistics reported on Thursday that the annual headline Producer Price Index (PPI) rose 1.7% against estimates of 1.8% and the previous month's reading was revised down to 2.1% from 2.2%.
- Adding to this, the core PPI, which excludes volatile food and energy prices, came in at 2.4% YoY, also missing expectations for a reading of 2.5% and further pointing to signs of easing inflationary pressures in the US.
- Separately, data published by the US Department of Labor (DoL) showed that the number of individuals who applied for unemployment insurance benefits for the first time rose to 230K in the week ending September 7.
- According to the CME Group's FedWatch Tool, market players are now pricing in over a 40% chance that the US central bank will lower borrowing costs by 50-basis points at the end of a two-day meeting next Wednesday.
- Israel intensified airstrikes on Iranian-linked targets in Syria, while Hamas and Hezbollah pounded northern Israel on September 11 in one of the largest aerial attacks, fueling concerns over a wider conflict in the Middle East.
- Russian President Vladimir Putin warned on Friday that he would regard an agreement to allow Ukraine to strike targets inside Russia with Western-supplied missiles as tantamount to NATO directly entering the war.
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