Bitcoin and Gold Rebound After Hot Core CPI

Bitcoin and gold prices briefly tumbled after the August U.S. inflation report showed stronger-than-expected monthly core price growth, adding pressure ahead of the Federal Reserve’s September policy decision.

Annual core inflation came in at 2.4%, matching forecasts, while headline CPI stood at 3.4%, also in line with expectations. However, core CPI, which excludes volatile food and energy costs, increased 0.3% month over month, exceeding the 0.2% consensus estimate.

The unrounded monthly core CPI reading was 0.29%, above the range of forecasts published before the report. At that pace, core inflation would run at roughly 3.5% on an annualized basis.

Shelter costs, the CPI’s largest component, increased 0.3% in August and 3% from a year earlier. Energy prices contributed heavily to headline inflation, with the energy index climbing 2.1% for the month. Gasoline jumped 3.9% in August and was 27.4% higher year over year.

Financial markets reacted almost instantly. Spot gold initially moved toward $4,353 before plunging to around $4,292 within the same minute. It later recovered to approximately $4,358. Bitcoin followed a similar pattern, falling from about $77,100 to $76,050 before reclaiming much of the decline.

The synchronized Bitcoin and gold selloff highlighted growing sensitivity to U.S. Treasury yields. Hotter inflation can push bond yields higher, making non-yielding assets such as BTC and gold comparatively less attractive. The 10-year Treasury yield was already near 4.95% before the CPI release.

Attention now shifts to the Federal Reserve meeting on September 15-16. Traders are increasingly betting on a rate hike, while many economists have favored keeping rates unchanged.

The hotter monthly core CPI reading strengthens the case for tighter monetary policy, particularly after firm producer-price data. With the Fed’s preferred core PCE inflation gauge potentially remaining elevated, Bitcoin, gold and broader financial markets could face heightened volatility around Wednesday’s interest-rate decision.