US CPI data, which Bitcoin and gold investors have been eagerly awaiting, has been announced. According to the BLS statement, US CPI decreased to 3.2% compared to the 3.3% forecast. Following this development, the gold price jumped over 0.4%. Additionally, Bitcoin price has increased by over 1% in the last hour.
US CPI was below expectations
Inflation in the United States, as measured by the change in the Consumer Price Index (CPI), fell to 3.2% on an annual basis in October, the U.S. Bureau of Labor Statistics (BLS) reported on Tuesday. This figure was below the market expectation of 3.2% and the September inflation figure of 3.7%. Core CPI, which excludes volatile food and energy prices, increased by 4% in the same period. Meanwhile, analysts’ expectation was that it would come in at 4.1%. As a result, while CPI remained unchanged on a monthly basis, Core CPI increased by 0.2%. In the BLS press release, he highlighted the following:
The housing index continued to rise in October, offsetting the decline in the gasoline index. It also left the seasonally adjusted index unchanged for the month. The energy index fell 2.5% for the month as a 5.0% decline in the gasoline index offset increases in other energy component indexes.
Gold market reacted positively to US CPI data
With the sudden reaction, the US Dollar came under heavy selling pressure. At the time of writing, the US Dollar Index (DXY) is down 0.65% on the day to 105.00. Meanwhile, the benchmark 10-year U.S. Treasury yield fell nearly 3% to 4.5%. With the impact of these developments, the gold price made a sudden jump. Gold rebounded vertically following the release of soft US inflation data. The yellow metal has recovered close to the 20-day Exponential Moving Average (EMA), trading around $1,960, while the 50-EMA near $1,938.00 continues to offer support.
Bitcoin shows positive momentum
Following the news, BTC price made a solid recovery from the $ 36,200 level. Bitcoin price generally tends to react to global economic trends. Now, according to analysts, it has set a new target aiming to break the $40,000 mark. Reducing inflation rates helps increase investor confidence. It is possible that this will lead to more investments in riskier assets such as cryptocurrencies. Additionally, Bitcoin is increasingly seen as ‘digital gold’, a hedge against inflation and a store of value. With the CPI falling, investors may be seeing this as a solid time to ‘buy the dip’ for Bitcoin before it potentially rises in value.
As you follow from Kriptokoin.com, Bitcoin increased by almost 40% in the five-week period. After this significant rise, it has stalled recently, hovering around $37,000 for the past few days. With the initial excitement surrounding the potential approval of a spot Bitcoin ETF fading, investors bullish on Bitcoin are now turning their attention to the latest CPI report, hoping it could serve as a new catalyst.
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