Gold Price Prediction – Prices Reverse Lower Following Strong Core CPI

Gold slides as the dollar gains traction
David Becker
Gold Bars and Dollar

Gold prices reversed course on Thursday moving lower following a stronger than expected US CPI report which buoyed the dollar paving the way for lower gold prices. This came despite a second testimony from Fed Chair Gerome Powell who reiterated his thoughts that the US was facing headwinds and that a rate cut in July was likely.

Technical Analysis

Gold prices moved lower reversing Wednesday’s gains, but prices made a higher high and a higher low which is a sign of an uptrend. Support on the yellow metal is seen near the 10-day moving average which comes in near 1,406. Resistance is seen near the July highs at 1,438. Short term momentum is negative as the fast stochastic accelerates lower. Medium term momentum is also neutral to negative as the MACD (moving average convergence divergence) histogram prints in the red with a downward sloping trajectory which points to lower prices.

Inflation Rises to a 18-month High

US consumer prices increased to an 18-month high in June amid solid gains in the costs of a range of goods and services. According to the Labor Department the headline consumer price index CPI edged up 0.1% last month, held back by cheaper gasoline and food prices. Expectations were for CPI to remain unchanged in June and rising 1.6% year-on-year.The CPI rose 0.1% in May. It increased 1.6% year-on-year in June after rising 1.8% in May. Excluding the volatile food and energy components rose 0.3% last month. That as the largest increase since January 2018 and followed four straight monthly gains of 0.1%. The so-called core CPI was boosted by strong increases in the prices for apparel, used cars and trucks, as well as household furnishings. There were also increases in the cost of healthcare and rents. In the 12 months through June, the core CPI climbed 2.1% after advancing 2.0% in May.

Don't miss a thing!

Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All

Top Promotions

Top Brokers

IMPORTANT DISCLAIMERS
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
RISK DISCLAIMER
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.
FOLLOW US