Jump to content

Gold prices may climb further if US PPI data disappoints


Recommended Posts

Gold gains as CPI data hints that inflation may have peaked; US producer price index (PPI) may sway bullion prices further and XAU climbs above January high, potentially fueling further gains.

1652328045159.jpg
Source: Bloomberg
 
 

Gold prices staged a rebound overnight after inflation cooled slightly in the United States, according to the latest consumer price index (CPI) for April. The CPI crossed the wires at 8.3% on a year-over-year basis. That was higher than the 8.1% Bloomberg consensus estimate. However, it was slightly lower from March’s 8.5% y/y figure.

The reaction in gold was likely due to the Treasury market’s behavior. Real yields – a major driver for bullion prices, fell following the CPI print. Lower real yields benefit gold because it is a non-interest-bearing asset, which lowers the opportunity cost of gold. The 10-year inflation-indexed rate fell 15-basis points overnight but remain in positive territory. The yellow metal may continue to gain if real yields drop further.

Tonight will bring the US’s producer price index (PPI) data for April. Analysts see PPI cooling to 0.5% on a month-over-month basis, according to a Bloomberg survey. That would be down from 1.4%, representing a rather significant drawdown. That may help to calm inflationary fears, as factory-gate prices are sometimes seen as a leading indicator for downstream inflation. Gold may move higher if tonight’s data comes in below expectations.

 

XAU/USD technical forecast

Gold prices are moving above the January swing high through Asia-Pacific trading, a level that has previously provided support. Holding that level may ignite further bullish energy to drive prices higher. If so, the falling 20-day Simple Moving Average (SMA) may cap upside. Meanwhile, MACD and the RSI oscillators appear to be improving.

XAU/USD daily chart

1652328202103.png
Source: TradingView

Thomas Westwater | Analyst, DailyFX, New York City
12 May 2022
This information has been prepared by DailyFX, the partner site of IG offering leading forex news and analysis. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • General Statistics

    • Total Topics
      22,165
    • Total Posts
      93,081
    • Total Members
      42,571
    • Most Online
      7,522
      10/06/21 10:53

    Newest Member
    shyamtastic
    Joined 10/06/23 20:44
  • Posts

    • Why isn't there a way to set options stop loss on IG platform?  Are you planning to implement this feature?
    • Hi,  I started trading Brent Crude Oil in IG platform but I could find a formula to correctly calculate the size I have to put while creating a position, based on the available amount I have. The quotation is based in points and it makes me wonder how operate. Any help is welcome.  Also, I plan to work with some leverage in the future, so any tip on this matter is also welcome.  Thanks.  
    • Greetings fellow traders, I am thrilled to share an exciting intraday trading idea for EURAUD that could potentially boost your profits. At Gold Signals by Professor, we have conducted a thorough technical analysis and confidently recommend a Buy position for traders like you. Our analysis indicates a significant development: EURAUD has managed to sustain itself above the crucial level of 1.60927. This breakthrough suggests a positive momentum, with potential targets at 1.61500 and 1.61800. To mitigate risks, we advise setting a stop loss around 1.60375. In order to maximize your trading success, it is vital to stay well-informed about the latest news and events that may impact the FX market. Factors such as global economic conditions, geopolitical tensions, and central bank policies can influence the price movements of EURAUD. Please note that the momentum of the trade can be influenced by unforeseen events or news. Therefore, we will be updating this level regularly in our channel to ensure you have access to the most recent trends and analysis of Gold and its trading potential. Wishing you all a prosperous day filled with successful trades!
×
×
  • Create New...