#8月核心CPI超预期 The CPI “shoe” has dropped—why did gold fall first and then rebound?

In early Asian trading on September 14, spot gold was trading around $4,330 per ounce, extending the volatile pattern following Friday’s CPI data.
The US August CPI data released last Friday (September 11) produced one of the most dramatic episodes in the recent gold market: gold prices initially plunged after the data was released, but then quickly surged, with spot gold jumping $110 intraday to set a new daily high of $4,400.81 per ounce.

Why did a “hawkish” inflation report fail to crush gold? CPI data: Headline inflation broadly met expectations, while core inflation was unexpectedly strong
First, the data itself. Headline CPI rose 3.4% year-on-year in August, matching market expectations and the previous reading; it rose 0.4% month-on-month, in line with expectations but rebounding sharply from July’s 0.1% to the highest level since June. What truly alarmed the market was core CPI: it rose 0.3% month-on-month, above the expected 0.2%, marking the largest monthly increase since April.

Breaking it down, energy was the main driver of headline inflation.
Gasoline prices jumped 3.9% month-on-month in August, accounting for more than one-third of the month’s overall CPI increase on their own. Geopolitical conflicts have pushed up oil prices, with Brent crude already above $107 per barrel, and the pass-through effect of energy inflation is continuing. The upside surprise in core CPI mainly came from services. The shelter index rose 0.3% month-on-month, while communications, lodging, and airfares also posted notable increases. Core services inflation excluding shelter surged 0.51% month-on-month, its highest level since January.
After the data was released, market bets on a Fed rate hike in September quickly jumped from around 70% to roughly 90%. The 10-year US Treasury yield remained near 4.95%, while the 2-year yield also rose, supporting the dollar—an unfavorable combination for gold.

Why has gold “stopped falling”? In theory, with the probability of a rate hike surging to 90%, gold should have come under downward pressure. But the market’s actual reaction was: an initial decline, followed by a sharp rebound.
The first reason is that the trading logic of “selling the news” took effect. A CITIC Securities report noted that near-term rate hike expectations had largely been fully priced in, and the data’s release instead triggered a “sell-the-news” trade, causing gold to fall first and then rise. Once the market had already priced in a September rate hike as a high-probability event, confirmation from the data instead caused short-selling momentum to run out.
The second reason is that although core CPI was strong month-on-month, its year-on-year reading fell from 2.5% to 2.4%, the lowest level since March 2021. This means that core inflation is still cooling gradually on an annual basis. Fed Governor Waller had previously set “a rebound in CPI” as the threshold for a rate hike, but the decline in core CPI year-on-year gave the market some room to imagine that “perhaps rate hikes will not continue.”
The third reason is gold’s own technical support. Gold prices previously found support in the $4,315-$4,288 range before climbing back above $4,341, the reference level for the 200-day exponential moving average. FXStreet’s technical analysis also pointed out that the 50-day moving average at $4,268 provides trend support; as long as gold prices do not clearly break below that level, the broader bullish structure remains intact.

What should we watch next?
The biggest variable this week is the Fed’s September 15-16 policy meeting (with the rate decision announced at 2:00 a.m. Beijing time on September 17). The market has already priced in about a 90% probability of a rate hike, meaning the hike itself is unlikely to deliver a new shock—the real focus will be Fed Chair Warsh’s remarks after the meeting. If Warsh characterizes the hike as a “one-time adjustment,” signaling no urgency to continue tightening, the dollar and Treasury yields could stabilize or even decline, giving gold a window for recovery. Conversely, if the policy statement suggests that progress on inflation has stalled and further tightening is needed, gold could face a new round of pressure.
Another variable requiring continued attention is oil prices. The situation in the Middle East has yet to ease, Brent crude remains above $100, and the energy-inflation transmission chain is still operating.
For gold, this creates a contradictory dynamic: elevated oil prices intensify inflation concerns, reinforce rate hike expectations, and weigh on gold prices; yet persistent inflationary pressure itself supports gold’s inflation-hedging properties over the medium to long term.
One-sentence summary
In the short term, gold’s most difficult period may be passing, as the most hawkish expectations have already been priced in. But confirmation of the true direction will still depend on Warsh’s remarks on Wednesday. Before the interest-rate path becomes fully clear, gold prices are likely to continue fluctuating within the $4,300-$4,450 range.$XAUUSD