How critical is CPI data? Just look at the trend of gold for the answer. Before the data is officially released, gold has already started the rally in advance, breaking through the $4,400 mark yesterday, reaching a two-month high.
The question then arises: can this wave of gold's rally continue? Will BTC catch the tailwind? Today, let's discuss these two topics in detail.
Let's first talk about CPI. Many friends see this term in market news every day but may not fully understand what it is. In short, CPI is the barometer of prices. Whether our daily expenses such as buying groceries, paying rent, refueling, or medical expenses are getting more expensive or if the increase is slowing down can be clearly understood by looking at this data.
So why does the US CPI affect global markets? The core reason is that it directly influences the Federal Reserve's interest rate cut schedule.
A high CPI indicates that inflation remains stubborn, and the Federal Reserve is hesitant to lower interest rates; a continuous decline in CPI suggests that inflation is cooling down, which opens up room for rate cuts. Thus, what the market is truly focused on is not the CPI number itself but whether it will change market expectations regarding the Federal Reserve's interest rate cuts — this is the key to driving market movements.
Understanding the underlying logic of CPI makes this wave of gold rally clear.
Recently, gold's performance has indeed been strong, stabilizing above $4,400 in the spot market, with some platforms even briefly touching above $4,410. From last week until now, this rally has exceeded 7% in just one week.
However, this rise did not come out of nowhere; there is a very core catalyst behind it: US employment data has clearly weakened.
Last Friday's non-farm payroll data for July fell significantly short of expectations, with the market originally forecasting an increase of about 80,000 jobs, but instead decreasing by 23,000 jobs.

Moreover, it's worth noting that the employment data for the previous two months was also significantly revised downwards, with a total downward adjustment of over 100,000 jobs. This indicates that the US job market is far from as strong as it appeared before.
The market reacted quickly and immediately began to re-bet on the Federal Reserve's interest rate cuts. And gold is particularly responsive to rate cut expectations.
Gold itself does not generate interest; when interest rates are high, people prefer to put their money into interest-bearing assets, making gold less attractive; but once the market generally expects rates to fall, gold's cost-performance ratio immediately becomes evident.
So, this wave of the gold market can be summarized as: cooling employment data → rising rate cut expectations → ongoing capital inflow, with several forces combining to drive up gold prices.

Of course, one must also consider the risks along with the bullish outlook. If tonight's CPI data exceeds expectations and remains strong, the expectations for rate cuts may cool temporarily, and the short-term funds that entered earlier will likely take profits, putting gold at risk of a pullback, with support to watch around 4350, and a deeper decline cannot be ruled out.
With gold at the $4,400 level, many people will feel conflicted: should they chase in now, or wait for a retracement to jump in? Actually, there is no standard answer to this question. However, if you are making a long-term investment, one thing that is often overlooked is the cost difference associated with different buying channels.

Investing the same 100,000 in gold but through different channels can result in a significantly larger actual return difference in the long run than you might think.

For example, if you invest 100,000 and assume gold rises by 50%, products with low fees have a smaller cost ratio, allowing most of the gains to be realized; however, high-premium channels deduct fees upfront when buying and then further discount upon selling, over time, this difference will widen.
Therefore, when investing in gold, one should not only focus on how much the price can rise but also calculate the hidden costs incurred for this investment. This difference might not be obvious in the short term, but the longer you hold, the more important it becomes.
In the end, position management is always more important than accurate prediction. If you misjudge the market, there will always be another opportunity; but if your position is out of control and you face liquidation, there truly is no chance for a comeback.
Finally, let's clarify the core logic:
CPI reflects the level of inflation, but what the market truly cares about is the corresponding interest rate cut rhythm and liquidity changes behind it.
Gold breaking through 4400 is essentially the result of weak employment data, rising rate cut expectations, and ongoing capital inflow working together.
If tonight's CPI continues to cool, gold could push toward the 4500 mark; if the data significantly surpasses expectations and strengthens, caution is required for a short-term pullback risk.
As for BTC, its sensitivity to liquidity is even higher than gold; once the expectations for rate cuts continue to rise, its price elasticity will likely be greater than gold's.
As a final reminder, never bet on a single number using high leverage when major data is released; being a bit steadier is always wise.
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