US Inflation Report Triggers Decline in Gold and Bitcoin Prices

On September 10, a hot inflation report from the US sent shockwaves through financial markets, impacting traditional safe-haven assets like gold and cryptocurrencies such as Bitcoin. The US Producer Price Index (PPI) rose 0.4% in August, with an annual rate of 5.4%, slightly above expectations.

Gold, which is typically seen as a hedge against inflation, saw its price drop over 1%, falling below $4,350 after trading above $4,400. This decline was exacerbated by rising Treasury yields, with the 10-year yield surpassing 4.9%, its highest since October 2023. The increase in yields makes cash and government debt more appealing compared to non-yielding assets like gold and Bitcoin.

The market is now anticipating a potential rate hike from the Federal Reserve, with odds increasing to 70% following the inflation data. The dollar's strength, driven by these rate hike expectations, further pressured gold prices.

As the situation develops, the upcoming Consumer Price Index (CPI) report will be crucial in determining the Fed's next steps and the future trajectory of inflation hedges like gold and Bitcoin.