Gold Prices May Breach Key Support on US Inflation Uptick

Talking Points:

  • Gold prices competence mangle pivotal support as US CPI uptick boosts Fed rate travel bets
  • Retail traders design bullion gains. Find out here what this hints about a trend
  • Crude oil prices revelry in flushed IEA direct forecast, improving risk sentiment

Gold prices incited reduce as August’s US PPI information stoked Fed rate travel speculation, pushing Treasury bond yields aloft alongside a US Dollar and undermining a interest of non-interest-bearing and anti-fiat assets. While indiscriminate acceleration purebred somewhat weaker than expected, a news still put a title on-year expansion rate during a three-month high (2.4 percent vs. 2.5 percent forecast).

Investors’ concentration now turns to a higher-profile CPI information set. Here, a second uninterrupted boost is approaching to place year-on-year expansion during 1.8 percent, a strongest given May. An upside warn relating extended alleviation in US news-flow given mid-June competence devalue a yellow metal’s woes, yet if a PPI imitation is any indication, an uptick alone competence be adequate to enthuse sellers.

Crude oil prices marched aloft as expected, reveling in support from a flushed IEA news containing an ascent of 2017 direct projections to a tip in dual years. A incomparable than approaching register build appearing in a weekly EIA circular fell on deaf ears, echoing a sanguinary response to a likewise vast bloat on arrangement in a API estimate published a day earlier.

Improving risk ardour seemed to assistance as well. The benchmark WTI agreement accelerated ceiling as shares pushed aloft following a opening bell on Wall Street, vocalization to a broadly understanding sourroundings for cycle-sensitive assets. From here, Baker Hughes supply count information and CFTC suppositional positioning statistics spin out scheduled eventuality risk by a week-end.

What are a elemental army pushing long-term wanton oil cost trends? Find out here!

GOLD TECHNICAL ANALYSISGold prices are behind to exam support in a 1317.62-21.51 area (23.6% Fibonacci retracement, trend line) after a brief visual bounce. A daily tighten subsequent this threshold exposes a 1295.46-99.25 section (38.2% level, double top). Alternatively, a spin behind above a 14.6% Fib during 1335.24 opens a doorway for a retest of a Sep 8 high during 1357.50.

Gold Prices May Breach Key Support on US Inflation Uptick

Chart combined regulating TradingView

CRUDE OIL TECHNICAL ANALYSISCrude oil prices narrowly edged by trend line insurgency running them reduce given late Feb though a crack of a latest pitch high during 49.39 – determined on Sep 6 – valid to be conspicuously elusive. A serve pull above this separator exposes a Aug 1 tip during 50.40 next. Alternatively, a spin behind reduce sees initial support noted by a Sep 11 low during 46.98, followed by a Aug 31 bottom during 45.57.

Gold Prices May Breach Key Support on US Inflation Uptick

Chart combined regulating TradingView

— Written by Ilya Spivak, Currency Strategist for DailyFX.com

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