Tonight's U.S. CPI could teach gold investors a lesson!

Gold investors, take note! Tonight's U.S. CPI could trigger a very interesting market reversal.
Many people have a fixed idea: the higher inflation is, the more valuable gold becomes. It sounds very reasonable, but financial markets never follow simple formulas.
If U.S. CPI comes in hotter than expected again tonight, the Fed may need to maintain a more hawkish monetary policy and even further reinforce expectations of a rate hike in December.
That raises a question.
Rising rate hike expectations could strengthen the dollar and push up real Treasury yields. Gold itself pays no interest, so the opportunity cost of holding it rises, potentially putting short-term prices under pressure.
In other words, rising inflation doesn't necessarily push gold higher; sometimes it can actually take a hit first.
Of course, if the market fears that high inflation will erode purchasing power, or economic and geopolitical risks rise at the same time, gold may also attract safe-haven flows.
So tonight, the key for gold isn't simply the CPI figure, but how the dollar and real yields react after the data is released.
Remember: gold fears both inflation and high interest rates. What really determines its direction is how the market interprets inflation.
Do you think gold will break higher tonight, or face a pullback? #每周来晒 and #美国10月CPI即将公布 $NAS100