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Daily Brief, Feb 13: Economic Events Outlook – How to Trade Gold on US Inflation? 

Good morning, traders.

On Thursday, the eyes will be on the US inflation data, which are expected to report a slight recovery in prices. Coronavirus continues to impact the safe-haven appeal, while the dollar is also getting strong at the same time, ignoring the negative correlation between gold and USD. The dollar may gain more bullish momentum in case of positive CPI report during the US session today.

US Inflation Figures –– 13:30 GMT
The Core Consumer Price Index (CPI) covers the changes in the price of goods and services, excluding food and energy. A higher than expected reading should be taken as positive/bullish for the USD, while a lower than expected reading should be taken as negative/bearish for the USD.

Lately, the US Federal Reserve has been displaying impediment with the lack of inflation – which is a global aspect. The numbers for December will likely record that the Core Consumer Price Index – the most vital number – settled around 2.3% reported in January. Both headline and core monthly figures carry forecasts for an expansion of 0.2%.

The US annual inflation rate accelerated to 2.3% in Jan 2020 from 2.1% in the prior month and above the market forecast of 2.0%. It’s the highest inflation rate since November 2018, as food inflation was slight while energy prices sank at a much slower pace.

Daily Gold Outlook

Today in the early Asian session, the safe-haven-metal prices got support and representing 0.30% gains on the day mainly due to risk-off market sentiment in the wake of coronavirus intensified fears. The yellow metal is currently trading at $1,570 per Oz, representing a 0.30% gain on the day. As we are all well aware that the coronavirus is back in action, while the latest report came that the number of infected and dead people from Hubei registered a sharp rise due to the change in the updated diagnostic standard.

The numbers mention 14,840 new coronavirus cases, with the death toll rising by 242 to 1,310 at the end of February 12, 2020. However, the renewed coronavirus fears could be the reason behind the risk-off sentiment because of a big jump seen in the coronavirus cases in China.

The futures on the S&P 500 SPX are currently down 0.30%, and so is the price of WTI oil. Japan’s [[NIKKEI]] is also representing a 0.10% drop. Meanwhile, the Japanese yen is attracting bids against commodity dollars, AUD, NZD, and CAD currencies. Markets might review the historical data with the new method. If the trend is found to be slowing, the risk sentiment could improve, ultimately decreasing the bid tone around gold.


Daily Support and Resistance
S1 1548.92
S2 1557.54
S3 1561.75
Pivot Point 1566.15
R1 1570.37
R2 1574.77
R3 1583.38

GOLD has formed a higher high pattern on the hourly timeframe, which is suggesting chances of more buying in the XAUUSD. Gold’s immediate support prevails at 1,572, along with resistance around 1,576. While the bullish breakout of 1,576 can open further room for buying until 1,582.

Good luck!

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Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.
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