Gold rises above $1300 on disappointing US CPI data

The XAU/USD pair gained traction and rose above the critical $1300 mark for the first time since September 26 but struggled to stretch its upside. As of writing, the pair was trading at $1300.50, adding $7, or 0.56%, on the day.

The pair's recent upsurge seems to be a product of a broad-based USD sell-off that had been triggered after macroeconomic data released from the U.S. After contracting by 0.1% in August, retail sales in the U.S. rose by 1.6% in September, missing the market estimate of 1.7%. On the other hand, although annual inflation measured by the consumer price index advanced to 2.2% in September fueled by the rising oil prices, it failed to meet the experts' expectation of 2.3%. Furthermore,  real average weekly earnings eased to 0.6% from 1.0% on a yearly basis.

With the initial reaction to the data, the US Dollar Index dropped to its lowest level in more than two weeks at 92.59. At the moment, the index is at 92.70, losing 0.27% on the day.

The next data from the U.S. will be the UoM Consumer Sentiment Index at the top of the hour. Later in the session, FOMC member Evans, Kaplan, and Powell will be delivering speeches.

Technical outlook

The initial hurdle for the pair aligns at $1302 (daily high/50-DMA) ahead of $1313 (Sep. 26 high) and $1320 (Sep. 18 high). On the downside, short-term supports could be seen at $1285 (20-DMA), $1275 (Oct. 9 low) and $1260 (Oct. 6 low). With today's rise, the CCI indicator on the daily graph broke above the 100 mark, suggesting that the bullish momentum is building up.

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