Is Gold losing its sheen due to inflationary pressure?

financialexpress.com:

By Bhavik Patel

Inflation is here to stay, that is what the US CPI report combined with PPI suggested. Specifically rises in wholesale prices will be passed down the consumer chain which is why both CPI and PPI came higher than expected. The dramatic rise is because of an upside spike in energy costs. Crude oil had surged on the back of supply curtail by OPEC+ and that inflationary pressure is being seen in every aspect. 

It is rare to see Crude Oil and dollar/ Treasury yields in tandem but right now both asset classes are trending higher. This had pushed Gold to 10-month low although yesterday it did bounce from $1900 where previously also we had seen support emerging around those levels. Any closing below $1900 could take gold back to its old support zone of $1875. After yesterday’s PPI data, the probability of a pause by the Federal Reserve at their September FOMC meeting next week had not diminished. 

According to the CME’s FedWatch tool, there is currently a 97% probability that the Fed will continue the pause of rate hikes that began at the last FOMC meeting in July. The Federal Reserve has raised rates at every FOMC meeting since its March 2022 meeting when it first raised the benchmark interest rate or Fed funds rate. The probability of another pause in November has also jumped  to 66.6% from 57.4% indicating the market is not expecting any rate hike soon. Yesterday the ECB hiked their rates and gave dovish comments indicating that they are done with the rate hike. This augurs well for gold.

Gold in MCX has made double bottom around the zone of 58,300 and any further weakness is only expected below that level. On the higher side, immediate resistance is at 59,000 followed by 59,500. Momentum oscillator has