The recent release of inflation data has had a significant impact on producers of metals and other raw materials. According to the Labor Department, the consumer-price index, which measures the prices of goods and services across the U.S. economy, saw a 0.6% increase in August compared to the previous month. This represents the fastest pace of inflation in over a year, with more than half of the increase attributed to rising gasoline prices.
Following the data, the dollar experienced a rise as market participants anticipated that the Federal Reserve would resume increasing interest rates to prevent a second wave of inflation. As a result, gold futures, which are particularly sensitive to interest rate projections, plummeted to a three-week low.
Strategists at brokerage BNP Paribas believe that despite the energy-related increase in inflation, the Federal Reserve will overlook it. However, they caution that this approach may amplify inflation expectations in the following months. In order to consider implementing any rate cuts, BNP Paribas emphasizes that there needs to be a significant improvement in underlying non-housing services inflation, a scenario they do not anticipate.