US CPI Expected to Top 2.6% as Investors Brace; Gold Price Forecast and Crypto Impact

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As inflation fears mount, the data could significantly impact market sentiment and alter the Federal Reserve’s approach to interest rates. A higher CPI may push the Fed to reconsider its dovish stance, particularly after last month’s 25 basis point cut. Investors are now speculating whether the Fed will maintain its course in December or shift to a more cautious approach if inflation continues to rise.

Will Crypto’s Rally Pause Amid Fed Uncertainty?

Following Donald Trump’s election win, the crypto market rallied, buoyed by pro-crypto policies and investor optimism. However, the possibility of higher-than-expected inflation has raised concerns over whether the rally can sustain its momentum. According to the CME FedWatch Tool, there’s a 62% probability of another 25 basis point cut in December, but expectations could shift based on today’s CPI data.

Amid market uncertainty, some analysts predict a short-term pullback. However, veteran trader Peter Brandt remains bullish, forecasting Bitcoin could reach $327,000 in the long term. Investors are looking to upcoming U.S. PPI figures, remarks from Fed Chair Jerome Powell, and the Fed’s December meeting for additional signals on the direction of the market.

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Gold Struggles Against Bearish Pressure

Gold is trading around $2,609, recovering slightly from recent lows but still grappling with a bearish trend. The pivot point at $2,617 is a key indicator for short-term sentiment, with immediate resistance at $2,641. If bullish momentum strengthens, further resistance levels could be tested at $2,649 and $2,662. On the downside, support at $2,592 and $2,577 could come into play if selling pressure intensifies.

The 50-day EMA remains above the current price, signaling a bearish outlook, while the RSI stands at 41, suggesting mild bearish sentiment. Gold’s performance is likely to be influenced by inflation data and Fed policy, with traders closely watching for potential moves in response to market conditions.

Key Takeaways:

• Hotter CPI Expected: Inflation could exceed 2.6%, pressuring the Fed’s rate strategy.

• Crypto Rally at Risk: Investors are cautious as CPI data may impact the crypto market.

• Gold’s Bearish Streak Continues: Resistance at $2,641; support around $2,592.