Gold quickly reverses US CPI-led fall, jumps back closer to session tops

   •  Firming Fed rate hike prospects prompt some aggressive selling.
   •  USD fails to build on post-data up-move and helps recover lost ground. 
   •  Reviving safe-haven demand provides an additional boost.

Gold quickly reversed the US CPI-led knee-jerk fall and is now headed towards the top end of its daily trading range. 

Today's strong US consumer inflation figures increased prospects for 4 Fed rate hikes in 2018 and prompted some aggressive selling around the non-yielding yellow metal. This coupled with a goodish pickup in the US Dollar demand exerted some additional downward pressure on dollar-denominated commodities - like gold. 

The USD, however, struggled to build on its post-data gains and helped the commodity to regain some positive traction. Adding to this, a sharp fall in the US equity markets provided an additional boost to traditional safe-haven assets and further collaborated to the precious metal's sharp intraday recovery of around $17. 

Currently holding with modest gains for the third consecutive session, it remains to be seen if bulls are able to maintain their dominant position or the up-move once again meets with some fresh supply at higher level amid firming Fed rate hike expectations.

Technical levels to watch

A follow-through up-move is likely to confront resistance near $1340 level, above which the metal seems all set to challenge the $1348-50 supply zone. On the flip side, $1332 level now seems to protect the immediate downside, which if broken could accelerate the fall back towards $1326 horizontal level en-route $1318 support.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Feed news

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!

Latest Forex News

Editors’ Picks

EUR/USD pressured as EZ ministers fail to reach a deal

EUR/USD is trading around 1.0850, down on the day. Eurozone finance ministers failed to reach a deal on a joint response to the coronavirus crisis. Disease-related headlines are eyed.


GBP/USD is hovering around 1.23 as updates on the PM are awaited

GBP/USD is trading around 1.23, stable. Updates on PM Johnson's condition are eyed amid fears of a partial power vacuum. Updates related to the disease are eyed.


Forex Today: Dollar bounces as coronavirus keeps spreading, Johnson still in ICU, Fed minutes eyed

The market mood is mixed after US stock gains vanished late on Tuesday. The slide allowed the dollar to recover, and it is rising across the board early on Wednesday. Coronavirus has already infected more than 1.4 million and taken the lives of over 82,000 people. 

Read more

WTI pierces $25 amid mixed clues, EIA data eyed

WTI holds onto recovery gains. The US catalysts seem to drive energy prices more than from the Middle East. API data escalated the inventory build, EIA might follow the footprints. Coronavirus crisis weighs on the market sentiment. 

Oil News

Gold regains $1,650 amid cautious trade sentiment

Gold defies the pullback from the monthly top. While Monday’s coronavirus (COVID-19) data suggested receding fears of the deadly disease, the latest figures keep the risk-off alive. The US FOMC minutes will decorate the economic calendar.

Gold News