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US Inflation Sloping, Gold Prices Fall

Gold prices continue to slope.  On Thursday (11/8/2022) trading at 06:15 WIB, the world gold price on the spot market was at US$ 1,790.04 per troy ounce.  Shrink 0.12%.

 The weakening of gold extends the negative trend of gold which has been going on since yesterday.  In trading Wednesday (10/8/2022), gold prices also slid 0.11% to US $ 1,792.13 per troy ounce.

 In a week, gold prices fell 0.06% point to point.  But in a month, the price of gold still increased 3.3% while in a year jumped 2.2%.

Kitco Metals analyst Jim Wyckoff said the weakening of gold was due to the hawkish statement by the United States (US) central bank official, The Federal Reserve (The Fed), despite sluggish US inflation.  Minneapolis Fed President Neel Kashkari and Chicago Fed President Charles Evans confirmed that the US central bank would continue to aggressively raise US interest rates despite sluggish inflation.

 US inflation eased to 8.5% (year on year/yoy) in July this year, lower than 9.1% in June.  July inflation was also below market expectations of 8.7%.

 Kashkari said the Fed's benchmark interest rate will be brought down to 3.9% this year and 4.4% next year, from the current level of 2.25-2.5%.  "Nothing has changed. We have to bring inflation back to the 2% level," Kashkari said, as quoted by Reuters.

Kashkari's statement contradicted market expectations, which originally hoped that the Fed would reduce its policy aggressiveness once inflation slowed.

 "Gold briefly rose after the announcement of US inflation data came out but then weakened. Investors realized that if inflation has not reached a low level, inflation is only sloping," Wyckoff told Reuters.