Strong PPI and stable labour market support Dollar and pressurize Gold, $3,339 holds as key support

Sunil Kumar Dixit SK Charting

.PPI & Core PPI numbers showing inflationary pressures remain elevated.

.Initial Jobless Claims showing moderation, indicating a stable labour market.

.Dollar Index jumps off the lows reaching 98.10

.Gold retests $3335 horizontal support and attempts recovery struggling to reclaim $3360

What's driving Gold down?

Stronger than consensus PPI and core PPI numbers reflect constant inflationary pressures adding tailwind to Dollar and rising expectations of Fed maintaining tighter fiscal stance ahead.

Lower than expected Jobless Claims reflect a stable labour market which again supports the greenback

Dollar recovering off the lows reaching 98.10 works against Gold which is testing $3335

Reactive relief rally faded at $3356 and currently dropped to $3335

What's Ahead ?

Bulls need to defend $3335 as this zone aligns with ascending channel support trendline failing which, Gold will be exposed to further decline to $3330-$3325-$3322

A consolidated rebound requires holding above $3335 and price action breakout above $3358 which is overhead turning point for further upside.

Author

Sunil Kumar Dixit

SK Charting

Sunil Kumar Dixit is Chief Technical Strategist and founder of SK Charting, a research firm based in India. He tracks Precious Metals, Energy, Indices and Currency Pairs. He also participates as an expert panellist on Channel Television, Nigeria.

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