gold CAD BOC Gold in CAD gears up for another 75 bps hike from Bank of Canada
Gold priced in Canadian dollars now has an even bigger obstacle to overcome next week as analysts start to price in another 75 basis point rate hike from the Bank of Canada due to problematic core inflation that is not cooling down.
Annual inflation showed signs of cooling in September, coming in at 6.9%, down from August's 7%, and marking the third monthly deceleration. However, excluding food and energy prices — a measure more important to the Bank of Canada — prices rose 5.4% from 5.3% in August. All eyes are on next week's monetary policy meeting, and market expectations are starting to climb from 50 bps to 75 bps come October 26.
So far, Canada's central bank has been on par with the Federal Reserve's rate hike cycle and sometimes even slightly ahead. With the upcoming October meeting, Canada's key rate will rise higher than that of the Fed, which is currently between 3%-3.25%. Markets are also expecting another 75 bps hike from the Fed come November.