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David Becker
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Gold prices bounced near support despite a rally in the dollar and lower long-term U.S. yields. Yields declined on Thursday despite a second straight trading session where there was stronger than expected headline and core inflation numbers reported by the Labor Department.

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Technical analysis

Gold prices rebounded and closed up on the session bouncing at support seen at the 10-day moving average at 1,808. Resistance is seen near the 200-day moving average at $1,850. Target resistance is seen near the Fibonacci retracement level of 50.0%, which is seen near 1,876. The 10-day moving average has crossed above the 50-day moving average, meaning that a short-term uptrend is now in place. Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal. The current reading on the fast stochastic is 77, down from an overbought reading of 80, which foreshadows a correction.

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Producer Inflation Rises

Prices for intermediate goods surged higher in April. The new data comes a day after a sharp gain in consumer prices. The Producer Price Index rose 0.6% from March, according to the U.S. Bureau of Labor Statistics. PPI spiked 6.2%, year over year , the largest increase since the agency started tracking the data in 2010. Expectations were for a 0.3% monthly increase in April and 3.8% year over year. The core PPI, which excludes volatile items like foods, energy and trade services, rose 0.7% in April from the previous month and jumped 4.6% year over year.

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