Gold trades near $1215 after US PPI figures miss expectations
- Annual core-PPI ticks down to 2.7% in July in the U.S.
- DXY reacts negatively to the data but recovers quickly.
The XAU/USD pair spiked up to a daily high at $1217.35 with the initial reaction to macroeconomic data releases from the United States but failed to stretch higher. As of writing, the pair was trading at $1215, adding 0.1% on the day.
The monthly report published by the U.S. Bureau of Labor Statistics revealed that the Producer Price Index stayed unchanged on a monthly basis in July following May's 0.3% growth and dragged the annual rate down to 3.3% from 3.4%. The core version that excludes food, energy, and trade service prices ticked down to 2.7% to fall short of the market expectation of 2.8%. The US Dollar Index fell to 95.15 in the first few minutes after the data release but was able to shake off the bearish pressure. At the moment, the index is up 0.12% on the day at 95.20.
Despite that recent movement the pair continues to fluctuate in its weekly range and struggles to make a decisive move in either direction. Later in the session, Chicago Fed Presiden Charles Evans will be delivering a speech.
Technical outlook
Following Monday's fall, the pair recorded modest recovery gains on Tuesday and Wednesday and is now holding on to small daily gains, helping the CCI indicator on the daily chart continue to pull away from the -100 mark to suggest that the bears are losing strength. The first support could be seen at $1207 (Aug. 8/Aug. 6 low) ahead of $1200 (psychological level) and $1194 (Mar. 10, 2017, low). On the upside, resistances align at $1220 (20-DMA), $1234 (Jul. 25/26 high) and $1249 (50-DMA).
Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
