Markets
Gold and Crypto Markets Expect Bullish Trends
Financial markets are expected to rally following the latest CPI data released by the US Department of Labor. The better-than-expected report showed a slowdown in the inflation rate on a monthly basis as well as year-on-year. According to the CPI data, US inflation cooled with the numbers falling to 0.1% month-on-month.
That took the annual figure to 3%, its lowest point since the pandemic. The annual decline is the first in about three years, fueling positive sentiment for favorable macro conditions in both traditional and digital markets. The all-time index rate fell from 3.3% in May as consumer prices fell. While gas prices fell 3.8%, shelter and food prices rose 0.2%.
CPI for recovery markets
Financial markets, including stocks, crypto assetsand gold prices saw a shift in sentiment, according to U.S. CPI data. Gold surged above $2,400 as hopes for interest rate cuts by the Federal Reserve grew. The precious metal hit $2,414, rising more than 1.8% amid intraday trading. Similar sentiments were also seen in stocks, although some assets declined.
Chris Larkin, MD of E-Trade Trading and Investments at Morgan Stanley, explained that the CPI data brings the financial market one step closer to the Fed’s anticipated interest rate cuts.A lot can happen between now and September 18, but unless most of the numbers move back into “hot” territory, the Fed’s rationale for not cutting rates may no longer be justified.”
That’s close to the Federal Reserve’s target of 2% annual inflation and has kept its benchmark interest rate steady amid steadily declining inflation over the years.
Another boost for cryptocurrency
Positive macroeconomic sentiments serve as a strong indication for inflows into crypto markets. As the Fed eases pressure on markets, investors often shift more funds into risk assets, signaling growth for Bitcoin and other assets. Meme coins are also tipped to make another comeback after the anticipated bounce. At press time, Bitcoin is trading at $57,545, down 0.3% over the past 24 hours, while the broader market cap is at $2.12 trillion hours after the CPI data was released.
Read too: Large BitMEX outflows could ignite Bitcoin bulls
✓ Share:
David is a financial news contributor with 4 years of experience in Blockchain Technology and Cryptocurrency. He is keen on learning about emerging technologies and has an eye for breaking news. Keeping up with the trends, David has reported on various niches including regulation, partnerships, crypto assets, stocks, NFTs, etc. Away from the financial markets, David enjoys cycling and horse riding.
The content presented may include the author’s personal opinion and is subject to market conditions. Do your market research before investing in cryptocurrencies. The author or the publication is not responsible for your personal financial loss.