Gold Traders Eyeing US Inflation This Week
Gold Lower on Monday
Gold prices are lower on Monday, failing to benefit from the sell off in USD on the back of Friday’s US jobs data. Despite the drift lower in USD, Fed tightening expectations have risen on the back of the data, informing the current price action in gold. With the headline NFP print of 100k almost double the 55k Wall Street was looking for, market pricing for a September hike is now back up to 60% from around 50% ahead of the data.
US Inflation On Watch
The lift is perhaps a little less than expected, suggesting that the bigger focus is on Friday’s incoming US inflation data. With that in mind, gold prices could be on the verge of a much heavier sell off if Friday’s data comes in strong and September rate hike pricing jumps accordingly. On the other hand, if Friday’s headline CPI print comes in below the 3.4% level expected, this could see rate hike expectations for this month falling back below the 50% level with gold prices set to rally there as USD comes off. Given that we’ve recently seen a hawkish shift in traders projections, a disappointment in Friday’s data would likely fuel the biggest move.
Technical Views
Gold
Gold prices are holding the 4,389.24 support level for now with 4,558.62 the next challenge while that level holds. If we do break higher again, 4,871.47 will be the higher bull target to watch while to the downside, 4,204.01 will be the key support level to watch.
Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.
Past performance is not indicative of future results.
High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% and 73% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Futures and Options: Trading futures and options on margin carries a high degree of risk and may result in losses exceeding your initial investment. These products are not suitable for all investors. Ensure you fully understand the risks and take appropriate care to manage your risk.
With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.