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Gold - all focus on US inflation data

Jan 11 2019, 02:55 PM (+06) |

Thursday gold session ended with a moderate decline around 0.4% under pressure from USD dollar, as USD index was able to gain the same 0.4%. Since the New Year start, US dollar remains the main driver of all movements in world markets, including the market of precious metals, global equities, and FX market. Fed recent statements by officials are forcing investors to adjust their positions due to the indefinite suspension of the US interest rate increase cycle.


According to a survey conducted by the Wall Street Journal, the overwhelming majority of economists expect the current level of interest rates to remain in the United States at least until June of this year, which generally corresponds to the latest statements and signals from the Fed. Speaking at a forum in Washington, Powell essentially reaffirmed his statements made last week that the Fed would be flexibility in the conduct of monetary policy. This is a strong long-term support factor for gold, which throughout 2018 was under pressure from the Fed's policy and the strengthening of the dollar, which made the yellow metal less attractive to investors. Since the beginning of 2019, the situation has changed dramatically, so despite the intraday volatility, the gold in the first half of this year look very promising.


Today, investors focus will be upon data on the consumer price index in the United States. This is the most important data of the week. This indicator is one of the key for the Fed in assessing the situation in the economy and making decisions on rates. Experts predict that both base indicators will remain unchanged, m / m at the level of 0.2%, and g / g at the level of 2.2%. Accordingly, downward deviations of the actual data may put even more pressure on the dollar, and support for gold.


On the chart, the price has moved to consolidation in a range that can be limited by 1280.00 - 1300.00. In addition, judging by the current situation in the coming days, we are unlikely to see any breakthrough. Accordingly, the main trading decisions should be taken at the boundaries of the trading range in which the price is now moving, given that the medium-term priority remains the option to exit up from consolidation.


§ Resistance levels: 1300.00, 1310.00, 1315.00;


§ Levels of support: 1281.00, 1278.00, 1270.00.

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