Gold Price Forecast: XAU/USD to extend its rally on slowing inflation – Commerzbank

Gold price climbed to $1,880 at the start of the week, thereby posting an eight-month high. The US inflation data for December will be released on Thursday and could lend further tailwind to the yellow metal, economists at Commerzbank report.

Inflation rate to have fallen from 7.1% to 6.5% 

“US inflation data could lend further tailwind to the Gold price given that the slowing of inflation that has been observed since the summer is likely to have continued last month.”

“The market expects the inflation rate to have fallen from 7.1% to 6.5% – our economists even envisage a drop to 6.4%. The last time it was any lower was more than a year ago. That said, there is already a substantial discrepancy between the expectation of market participants regarding the Fed’s monetary policy this year and what the Fed is continuing to communicate.”