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On September 3rd, ECB board member Mueller stated that with inflation close to target and the economy showing resilience, the central bank is fully capable of keeping interest rates unchanged next week. Asked about his expectation that officials would keep borrowing costs unchanged on September 11th, the Estonian central bank governor said such a view was "logical" given the likelihood of a gradual recovery in economic activity. "The sensible approach now is to take the time to monitor the incoming economic data over the coming months and, if necessary, to take a different approach," he said. These comments suggest that after eight rate cuts and the first pause in July, the Governing Councils willingness to ease policy further is waning.The VIX index of fear rose by 20% during the day and is now at 19.27.Volkswagen: It is adjusting production of the ID.4 electric vehicle at its Chattanooga plant, which will result in a small number of employees being temporarily furloughed starting in October.ECB board member Mueller: It makes sense to maintain interest rates and observe the economy.The Atlanta Feds GDPNow model expects U.S. GDP growth to be 3.0% in the third quarter, down from the previous forecast of 3.5%.

Gold price prediction: XAU/USD slips to $1,690 on Fed forecasts; US retail sales expected

Daniel Rogers

Sep 15, 2022 11:37

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Gold price (XAU/USD) has adopted a downward trend after falling below Wednesday's minimum of $1,693.67. The precious metal is falling nearing $1,690.00 as bears take control of rising probabilities for a massive Federal Reserve (Fed) rate hike in the near future.

 

Earlier symptoms of weariness have dissipated as a result of Tuesday's higher-than-anticipated US Consumer Price Index (CPI) report. Despite declining gasoline costs, the headline US CPI was announced at 8.3%, which was higher than the 8.2% prediction. The investment community believed that inflation had begun to respond to the Federal Reserve's (Fed) raising interest rates and that a succession of declining price pressures would soon enable the Fed to adopt a 'neutral' stance.

 

However, a US inflation report that exceeded forecasts demonstrates that the road to a neutral monetary policy is far from complete. Moreover, predictions of a one percent rate increase are currently ascendant.

 

In today's session, the US Retail Sales report will be of paramount importance. The economic data estimates do not indicate any improvement in retail demand. This could be the outcome of a fall in consumer confidence in the economy.

 

The gold price has experienced a precipitous decline after demonstrating a textbook-style test and the collapse of a consolidation pattern. On an hourly scale, the consolidation formed within the region of $1,697.12-1,709.62. At $1,698.70, the yellow metal is trading below the 20-period Exponential Moving Average (EMA), which increases the downside filters.

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