Gold prices continue to moves higher on Tuesday and has broken above the key resistance line of $1200. On the release front, today’s highlight is US Producer Price Index, a key inflation indicator. The markets are expecting another weak reading, with an estimate of -0.1%.
ECB head Mario Draghi and his colleagues are under strong pressure to “do something” to kick-start the weak Eurozone economy. Deep interest rate cuts haven’t had much effect, so the ECB has purchased covered bonds and asset-backed securities. So far, these securities have been from the private sector, and the ECB could decide to expand these purchases to government bonds, known has quantitative easing. However, there is resistance to quantitative easing from national central banks, such as the powerful Bundesbank. Speaking before a European parliamentary committee on Monday, Draghi said that further stimulus measures could include quantitative easing.
US consumer indicators looked strong on Friday. Retail Sales and Core Retail Sales both posted gains of 0.3%, edging above the estimate of 0.2%. UoM Consumer Sentiment continued its upward trend, climbing to 89.7 points in November. This was the indicator’s strongest performance since July 2007. Meanwhile, US Unemployment Claims has looked solid in recent readings, but the key indicator jumped to 290 thousand, missing the estimate of 282 thousand. This marked a seven-week high for the key indicator. The news wasn’t any better from JOLTS Jobs Openings, which weakened to 4.74M, down from 4.84M a month earlier. The estimate stood at 4.81M.
XAU/USD 1201.51 H: 1204.65 L: 1183.37
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