|

Gold clings to modest recovery gains ahead of US CPI

   •  Short-covering helps stage a modest recovery from over 1-week lows.
   •  A combination of negative factors keeps a lid on any meaningful up-move.
   •  Today’s key focus would be on the latest US consumer inflation figures.

Gold edged higher on Thursday, snapping two-days of losing streak, and recovered a part of the overnight slump back closer to YTD lows.

The incoming US economic data, with the latest PPI print showing that wholesale prices rose at the fastest yearly rate in almost seven years, reaffirmed expectations that the Fed would hike interest rates at least two more times in 2018 and prompted some aggressive selling around the non-yielding yellow metal on Wednesday. 

This coupled with firming US Dollar, amid intensifying trade rhetoric between the world's two largest economies, exerted some additional downward pressure and further collaborated to the commodity's sharp decline to over one-week lows. 

The bearish pressure eased a bit on Thursday, with traders opting to lighten their bearish bets ahead of today's key release of the US consumer inflation figures. However, signs of stability in global financial markets, coupled with a mildly positive tone around the greenback might continue to keep a lid on any meaningful up-move for dollar-denominated commodities - like gold. 

Technical levels to watch

A subsequent up-move beyond the $1247-48 immediate resistance is likely to confront fresh supply near the $1252 level, above which the metal could head back towards challenging a strong hurdle near the $1257-58 region.

On the flip side, the $1242-41 area might continue to protect the immediate downside, which if broken might turn the commodity vulnerable to retest YTD low level of $1238 before extending its near-term depreciating move.
 

Author

Haresh Menghani

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

More from Haresh Menghani
Share:

Markets move fast. We move first.

Orange Juice Newsletter brings you expert driven insights - not headlines. Every day on your inbox.

By subscribing you agree to our Terms and conditions.

Editor's Picks

EUR/USD off three-month highs, holds near 1.1800 on softer US Dollar

EUR/USD consolidates gains below 1.1800 in the European trading hours on Wednesday. A broadly subdued US Dollar continues to underpin the pair amid quiet markets and thin liquidity conditions on Christmas Eve. 

GBP/USD keeps range around 1.3500 amid quiet markets

GBP/USD keeps its range trade intact at around 1.3500 in the European session on Wednesday. The Pound Sterling holds the upper hand over the US Dollar amid pre-Christmas light trading as traders turn to sidelines heading into the holiday season. 

Gold retreats from record highs amid profit-taking on Christmas Eve

Gold retreats following the move higher to the $4,525 area, or a fresh all-time peak, though the downside remains limited amid a bullish fundamental backdrop. The US Dollar selling bias remains unabated on the back of dovish Fed expectations, which continues to act as a tailwind for the bullion amid persistent geopolitical risks.

Shiba Inu's bears tighten grip, aiming for yearly lows

Shiba Inu price remains under pressure, trading below $0.000070 on Wednesday as bearish momentum continues to dominate the broader crypto market. On-chain and derivatives data further support the bearish sentiment, while technical analysis suggests a deeper correction targeting the yearly lows.

Economic outlook 2026-2027 in advanced countries: Solidity test

After a year marked by global economic resilience and ending on a note of optimism, 2026 looks promising and could be a year of solid economic performance. In our baseline scenario, we expect most of the supportive factors at work in 2025 to continue to play a role in 2026.

Stellar Price Forecast: XLM slips below $0.22 as bearish momentum builds

Stellar (XLM) price is trading below $0.22 at the time of writing on Wednesday after failing to close above the key resistance earlier this week. Bearish momentum continues to strengthen, with open interest falling and short bets rising.