Gold Consolidates Near $1,770 – US Retail Sales Ahead!

Gold is trading higher following the release of a weaker Producer Price Index (PPI) report in the United States, which strengthens the Federal Reserve’s (Fed) case for slowing the pace of interest-rate rises. Geopolitical anxieties associated with Russia’s invasion of Ukraine, which engaged Poland and NATO, also pushed gold prices higher. As a result, the XAU/USD is currently trading at $1779 per troy ounce.

The US Department of Labor (DoL) stated that the US PPI for October decelerated from the previous month’s 8.2% and climbed by 8% year on year, less than the 8.3% predicted. Excluding volatile items, the core PPI increased by 6.7% year on year, down from 7.1% in September and less than the 7.2% increase predicted.

GOLD prices are projected to rise as a result of Federal Reserve officials’ decision to slow the tightening cycle following a positive Consumer Price Index (CPI) for October. Traders should know that after the CPI was released on Thursday, the yields on US Treasury bonds went down. For example, the yield on the 10-year benchmark note went down 27 basis points, from 4.117% to 3.818%. This hurt the US Dollar and helped the XAU.

Elsewhere, a bevy of Federal Reserve officials continued to underline the need to keep raising rates, despite praising October’s CPI and PPI statistics, as Atlanta Fed President Raphael Bostic highlighted in an essay posted on the Atlanta Fed Website, “There are glimmers of promise.” Bostic was repeating remarks made by Fed Vice Chair Lael Brainard, who indicated the central bank might decrease the pace of rate hikes but stressed that the work is not done. In the same vein, Fed Governor Christopher Waller stated that there is still “a long way to go” until interest-rate hikes are completed.

Gold Technical Outlook

The gold price resumes positive trading and moves away from the $1,765 level, supporting the continuation of the expected bullish trend scenario for today.

Gold’s primary target is $1,800, noting that the EMA50 continues to support the price from below, while achieving these targets necessitates holding above the $1,765 and $1,755 levels.

Today’s trading range is likely between $1,755 support and $1,795 resistance.

Today’s projected trend: bullish