Gold is trading around $4,310/oz this morning, close to its one-week low, after coming under heavy selling pressure from yesterday’s (Sept 10) PPI report, which jumped to 5.4% — well above forecasts. At the same time, oil prices spiked on renewed Middle East tensions, adding to inflation concerns and pushing the US Dollar Index (DXY) above 99, which further lifted the odds of a Fed rate hike at the September 15-16 meeting to around 60%.
Today’s focal point is the US CPI report, due tonight. This is the decisive data point: a hotter-than-expected print would likely extend gold’s slide by reinforcing the rate-hike case, while a cooler-than-expected number could trigger a sharp bounce off current lows.