High Gold Price Shows Demand, As Buyers Quickly Push Above $2,000

Today, the Gold price slipped below the $2,000 level for a second time this week after the strong PPI producer inflation, but it has reversed back up in no time. This sort of price action in Gold shows that buyers are looking for opportunities to buy any dip below in Gold, which is considered as a good level to go long.

Gold Fell Below $2,000 After the US CPI Inflation Report

Gold tumbled around $40 lower after the US CPI (Consumer Price Index) report on Tuesday, which showed a stronger reading than expected for January. This sent the USD higher, while other assets including Gold declined, with XAU/USD falling below $,2000 for the first time since the second week of December.

But, sellers couldn’t keep the price down too long. The price of GOLD continued to rise for the second consecutive day, reaching $2,010 per troy ounce earlier today. This suggests that the precious metal is experiencing some buying interest or investor demand.

XAU/USD was attracting buyers as the USD continued to retreat after the decline in January retail sales, which was released yesterday. The US retail sales report for January showed a larger-than-expected decline of 0.8%, compared to the projected 0.1% decrease. This indicates a weakening in household spending, which is a crucial component of economic growth, so the odds of the FED rate cuts during 2024 climbed above 100 bps again.

Today buyers remained in control during the Asian and European sessions, ahead of the release of more economic data from the United States. Investors often turn to gold as a safe-haven asset or hedge against economic uncertainty, especially before the publication of significant economic indicators, so traders were positioning themselves in Gold in anticipation of the potential market volatility associated with these data releases.

Strong US PPI Inflation Couldn’t Keep the Gold Price Down

The economic data from the US, including the Producer Price Index (PPI) had a positive impact on the USD and a negative impact on market sentiment which sent Gold prices below $2,000 again, as XAU printed a low of $1,995.30. But, we saw a quick reversal and Gold is trading around $20 higher at the moment. So, we are looking to buy Gold during another dip lower close to $2,000.

Live Gold Chart XAU