|

Gold spikes to 4-week tops but fails to extend the momentum

   •  Hits 4-week tops on persistent USD selling bias/risk-off mood.
   •  December Fed rate hike expectations cap additional gains. 

Gold quickly reversed the US macro data-led bullish spike to 4-week tops but has still managed to hold in positive territory for the second consecutive session.

The yellow metal jumped to an intraday high near the $1290 region following the release of US economic reports on retail sales and inflation. The market seemed unimpressed by today's macro data, with persistent US Dollar weakness benefitting dollar-denominated commodities – like gold. 

   •  US: CPI for all items increases 0.1% in October as shelter index rises
   •  US: Retail and food services sales for Oct. 2017 were $486.6 billion, an increase of 0.2% from Sep.

The data, however, was also seen having little monetary policy implication. In fact, the probability for a December Fed rate hike move remains above 90%, according to the CME Group's FedWatch Tool, and eventually kept a lid on any follow through up-move for the non-yielding metal.

Meanwhile, the prevalent risk-off environment, as depicted by a sea of red across global equity markets, underpinned demand for traditional safe-haven assets and helped the precious metal to maintain positive bias through the early NA session.

Technical levels to watch

A follow-through momentum beyond $1290 level is likely to accelerate the up-move towards $1295 intermediate hurdle en-route the key $1300 handle. On the downside, any meaningful retracement below $1284 level is likely to find support near the $1280 level, which is closely followed by 100-day SMA support near the $1278 region.
 

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

USD/JPY eyes August swing low, near 155.20 ahead of US NFP

USD/JPY retests the August monthly swing low during the Asian session on Friday as a more hawkish repricing of BoJ rate-hike bets and a suspected intervention continue to underpin the Japanese Yen. Meanwhile, the US Dollar is seen consolidating the previous day's heavy losses amid soft US bond yields, further weighing on the currency pair as traders keenly await the US NFP report.

AUD/USD consolidates above 0.7200; US NFP awaited

AUD/USD holds steady above 0.7200, near its highest level since mid-May, as bulls await the US NFP report for more cues on the Fed's policy path before placing fresh bets. Meanwhile, the recent decline in US bond yields keeps the US Dollar depressed near its lowest level in over a week and acts as a tailwind for the Aussie amid the RBA's hawkish tilt.

Gold tumbles as blockbuster US NFP lift US Dollar, Treasury yields

Gold (XAU/USD) falls sharply on Friday, snapping a two-day recovery after the US Nonfarm Payrolls (NFP) report surprised strongly to the upside. The metal briefly climbed above $4,500 on Thursday, gaining nearly 2%, but has since erased a large part of that advance.

Crypto’s $638 million buyback boom may not be as bullish as it looks
Decentralized Finance (DeFi) protocols reportedly spent $638 million to buy back their native tokens in August, up 17% from a year earlier. On the surface, the buyback trend suggests the cryptocurrency industry is maturing fast, adopting one of Wall Street’s oldest tools to bolster valuations and distribute revenue. The headline becomes less impressive once the number is opened up.
Why hawkish Bank of Japan expectations aren't enough to sustain the Japanese Yen rally

The Japanese Yen (JPY) experienced a sudden burst higher after falling back below the 160.00 psychological mark against the US Dollar (USD) earlier this week amid a more hawkish repricing of Bank of Japan (BoJ) rate hike expectations.

Diesel’s record $100 warning: The oil shock hiding in plain sight

The Oil market may look calmer than it did a few months ago, but diesel is sending a very different message. The US diesel crack spread, the premium of ultra-low sulphur diesel futures over WTI, recently surged above $100 per barrel for the first time, reaching an intraday record of just over $102.00.