Gold Can’t Hold Up Either! US CPI Blows Past Expectations—Why Are Safe-Haven Assets Being Sold Off Instead?

Gold investors may be a little confused: Isn’t gold supposed to shine brighter the more chaotic the world gets? So why did it take a hit as soon as inflation came in above expectations?
The answer lies in the dollar and interest rates.
The US CPI rose 0.4% in October, while core CPI rose 0.3%, both above expectations. This prompted markets to raise their bets on Fed rate hikes again.
If US interest rates continue to rise, dollar-denominated assets may become more attractive, while gold itself pays no interest, raising the opportunity cost of holding it.
More troublingly, if the dollar strengthens and real interest rates rise, gold could face pressure from both sides in the short term.
However, gold has not lost its long-term portfolio value. Geopolitical risks, central bank gold buying, fiscal deficits, and concerns about the dollar’s credibility could still support gold over the long term.
So gold is not an automatic ATM that rises whenever inflation shows up.
In the short term, watch interest rates; in the long term, watch credibility. It may take a beating from the dollar in the near term, but it may not give up in the long run.
The biggest risk when investing in gold is remembering only that it’s a safe haven and forgetting that it can also suffer pullbacks. #每周来晒 and #美国10月CPI全面超预期