|

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:

Editor's Picks

EUR/USD slumps below 1.1750 as USD benefits from risk-aversion

EUR/USD comes under renewed bearish pressure in the European session and trades below 1.1750 following a recovery attempt earlier in the day. The US Dollar gathers strength and weighs on the pair as investors seek refuge in the wake of Israel and the United States' joint attack on Iran.

GBP/USD targets 1.3500 barrier near moving averages

GBP/USD rebounds from the daily losses, trading around 1.3450 during the Asian hours on Monday. The technical analysis of the daily chart indicates an ongoing bearish bias, as the pair trades within a descending channel pattern.

Gold surges on safe-haven demand, rises above $5,400

Gold benefits from intense risk-aversion on Monday and climbs above $5,400, setting a fresh monthly-high in the process. Tensions in the Middle East remain high as Israel and Hezbollah continue to exchange strikes following the US-Israel joint attack on Iran over the weekend.

Bitcoin, Ethereum and Ripple under pressure as key supports face breakdown risk

Bitcoin, Ethereum, and Ripple prices trade on the back foot at the start of this week on Monday, after extending losses in the previous week. BTC is on the brink of a breakdown, ETH is capped below key resistance, and XRP risks a crack of the trendline.

The market is paying for insurance, not apocalypse

As expected, this morning felt less like a Monday market open and more like a fire drill. Futures screens flickered red. S&P contracts down almost 1%. Nasdaq off 1.2%. Brent leaped 13% through $80. Gold rose 1.6% toward $5350 before paring some gains. The dollar is strutting mildly. The Swiss franc is quietly doing what it always does in a storm, catching some safe-haven flows.

Pi Network Price Forecast: Core team offloads supply, weighing on PI recovery

Pi Network  hovers below $0.1700, broadly steady at press time on Monday, attempting a recovery after a 2% loss the previous day. Sunday’s decline aligned with nearly 49 million PI tokens offloaded by the Pi Foundation, implying a spike in supply pressure that capped the prevailing four-day recovery.