On Tuesday (July 13), international gold prices rose slightly, but the US dollar index maintained a rebound pattern, limiting the rise in gold prices. Investors pay attention to the upcoming US inflation data, which may provide more information for the Fed’s pace of tightening policy. The US June CPI data will be released on Tuesday, and the core CPI annual rate is expected to rise by 0.2 percentage points to 4%. Fed Chairman Powell will testify in Congress the day after tomorrow to show the decision-makers' views on inflation data.

IG Market analyst Kyle Rodda said that the CPI data will build the market’s view of Powell’s testimony. “I think the Fed is moving closer to the market’s desire to normalize monetary policy. If they continue along this path or accelerate, That will be bad for gold.” TD Securities analysts led by Bart Melek said in the report that despite the continuous weekly rise, gold still failed to break through the recent range against the background of low interest rates and real yields. Speculators have no incentive to buy gold after the Fed’s hawkish rhetoric. However, strategist Robin Tsui pointed out that central bank demand and ETF potential capital inflows are expected to support gold prices in the second half of the year; he said that in the next two months, the price should consolidate above US$1,800 and may rise to US$1,900.

The price of gold recorded its biggest monthly decline since November 2016 in June, as the Fed’s attitude changed unexpectedly after the June policy meeting. However, Chairman Powell later repeatedly reiterated that policymakers will not raise interest rates too quickly based solely on concerns about upcoming inflation, and will work to achieve a "broad and inclusive" recovery of the job market.

In view of the current labor market conditions, Richmond Fed President Barkin is not ready to call on the Fed to end its $120 billion monthly bond stimulus plan. He said that if the labor market can heal relatively quickly, it may happen sooner, but if the labor market takes longer to restart, it will be later. Michael Langford, director of corporate advisory company AirGuide, said: “Unless there is unexpected news, I expect gold to consolidate and trade in the range of US$1,800/ounce to US$1,820/ounce in the next week.”

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