US CPI Rose 0.4% Monthly, 3.4% Annually in August

The US CPI data came in at 0.4% month-over-month and 3.4% year-over-year, slightly above or near expectations; this increases the likelihood that the Fed will delay interest rate cuts, potentially supporting the DXY in the short term. Technical indicators already point to a moderate upward bias: the price is above the SMA20 and SMA50, and the RSI at 61 is in positive territory but not overbought. Although the MACD line is slightly below the signal line, it is moving sideways around zero, indicating no strong momentum. The limited 0.13% increase in the last 24 hours suggests that the market has not yet fully reacted to the data or the reaction has been weak. Therefore, I expect a mild upward movement in the DXY over the next 1-3 days, but the details of the inflation data and comments from Fed officials could change the direction; hence, I maintain a medium confidence level.

The US CPI data came in slightly above expectations at 0.4% month-over-month and 3.4% year-over-year; this could delay Fed rate cuts and keep real rates high, potentially creating a short-term negative impact on gold (GLD). However, GLD's last close at 4339.92 is well above its 20 and 50-day moving averages (401.57 and 403.39, respectively), indicating a strong upward trend continues. The RSI at 32.3 is near oversold territory, and the MACD is below the signal line in negative territory; this suggests short-term momentum is weak but may be open to rebound buying. The impact of the inflation data may be limited as the market continues to price in Fed policies; nevertheless, potential strengthening of the dollar index after the data could put pressure on gold. Overall, in the 1-3 day outlook, I assess that downside risk has increased somewhat, but due to the strength of the trend, the decline may be limited.