Gold consolidates gains, set for highest close in two months
Gold rose for the third day in a row and is about to post the highest close since June 6, as it hovers around $1,285/oz (up 0.60%) amid risk aversion, soft US inflation data, and a weak US dollar.
The Dow Jones is falling 0.60% and reached the lowest level in 10 days. In Europe, stock markets finished with losses between 0.50% and 1.40%. The risk-off environment continues to boost the demand for safe-haven assets, including bonds, the yen and gold.
Today’s economic data from the US showed an unexpected decline in July of the Producer Price Index, that fell 0.1%, against expectations of a 0.1% rise. It was the first negative reading for the index in almost a year. The data goes in the opposite direction of another rate hike from the Federal Reserve during 2017.
US: Despite soft PPI, fundamentals point to firm inflation ahead - Wells Fargo
On Friday, the key report will be the US Consumer Price Index, that is expected to show an increase of 0.2% in July and 1.8% y/y. Another reading below expectations could add pressure to the US dollar and could favor the upside in gold.
XAU/USD Levels to watch
The yellow metal peaked today at $1,287, that could be seen now as the immediate resistance. Above the next levels to watch might lie at $1,290 followed by 2017 highs at $1,296 and then, the $1,300 handle. On the downside, immediate support might lie at $1,283 (US session low), $1,278 (Aug 9 high) and $1,274 (Aug 10 low).
Author
Matías Salord
FXStreet
Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.
