Gold News: XAUUSD Holds Midpoint as Core CPI Tests December Hike Trade

Gold Stalls at Midpoint Ahead of CPI

Spot gold is sitting on its midpoint ahead of CPI and the market has not decided whether that is a base or just another pause in a downtrend. The dollar is off its highs. Gold is holding near $4,142 even with oil moving higher again after an attack on a Saudi Aramco building. That is keeping sellers from pressing the break.

But buyers do not own this market. They have not taken out the new main top. The December hike is heavily priced and nobody is backing away from it. CPI is the report that decides whether the rate trade loosens or tightens from here.

At 11:15 GMT, Spot Gold (XAUUSD) is trading at $4,143.77, down $17.02 or 0.41%.

Daily Spot Gold (XAUUSD) Technical Analysis

Spot gold is edging lower early Wednesday for a third straight session. The main trend is down according to the daily swing chart. A trade through $4066.54 will signal a resumption of the downtrend. The new main top is $4217.40. Taking out this level will change the main trend to up.

The minor range is $4066.54 to $4217.40. The market is currently testing its 50% level at $4141.97. Trader reaction to this level is likely to set the tone today. A sustained move over it will indicate the presence of buyers. A sustained move under it will mean that sellers are still in control.

If the pivot at $4141.97 fails to hold, $4066.54 is the main downside target.

The main top has moved from $4399.67 to $4217.40, or closer to the market. A sustained move through $4217.40 will change the main trend to up.

Soft Core Is the Only Print That Reopens the Door

The 0.6% monthly and 3.6% annual headline forecasts are already old news. December is at 90%. Gold traders waved that off weeks ago. Core is the print the market is actually waiting for.

A soft core reading is the only thing that loosens the December grip. Yields come off. The dollar stays off Monday’s high. That is three things going right for gold from one print.

A hot core does the opposite and it does it fast. December is already at 90% and an upside surprise closes the last exit. Sellers get a clean shot below the midpoint with nobody arguing the other side.

PPI and retail sales follow Thursday. One number does not turn the rate story. A soft CPI followed by firm producer prices and strong spending takes the gift right back. Gold needs softness across more than one print this week before the rate trade starts to loosen.

Nobody Is Trading October

New York Fed President John Williams still sees the possibility of one more rate increase this year. Governor Christopher Waller said higher Treasury yields are reflecting stronger growth, not unanchored inflation expectations. October is a free pass. December is not.

CME FedWatch has October at 22% and December near 90%. Nobody is trading the next meeting. December is the one that matters and CPI sets the odds.

The dollar index was near 102.16 Wednesday after sliding 0.35% Tuesday. That is helping gold hold its range. It does not change the larger problem. It is not a real dollar move. The market is standing down ahead of CPI and a hot print brings dollar buyers right back.

Beige Book and Fed speakers are background until the data hits. CPI changes the rate probabilities. Nothing else on the calendar does.

Oil Bid Is Not Helping the Rate Case

Oil moved higher after Saudi Arabia said an administrative building belonging to Saudi Aramco in Dhahran was attacked. That puts supply risk back in the energy market and keeps the inflation argument alive.

Gold holding while oil rises tells you something. Sellers should be pressing this market lower on the rate story. They are not getting it done. Oil is getting in the way. But that is not a reason to go long either. Gold traders already know what rising crude does to the rate case.

Gold is holding here. It has not earned a rally.

What to Watch

Three reports in 48 hours and none of them are priced yet. CPI is the one that resets the December odds. PPI and retail sales either confirm that reaction or take it apart. The Aramco bid in oil is keeping inflation pressure alive when gold needs it to go away. The dollar backing off is the only thing preventing sellers from pressing the break. Take the dollar away with a hot CPI print and gold loses its last excuse to hold this range.

The bias stays down with the downtrend on the daily swing chart and the main top compressing closer to the market. The $4,141.97 midpoint is the line. Gold has held it for three sessions but holding is not building a base. A break through $4,217.40 changes the trend and could force short-covering. Under the midpoint, $4,066.54 is where sellers are aiming.

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