Gold Price Prediction – Prices Rise Rebounding from Support Following Robust Producer InflationPPI rises more than expected
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.
Trade gold with FXTM
Trading Derivatives carries a high level of risk to your capital and you should only trade with money you can afford to lose. Trading Derivatives may not be suitable for all investors, so please ensure that you fully understand the risks involved, and seek independent advice if necessary. A Product Disclosure Statement (PDS) can be obtained either from this website or on request from our offices and should be considered before entering into a transaction with us. Raw Spread accounts offer spreads from 0.0 pips with a commission charge of USD $3.50 per 100k traded. Standard account offer spreads from 1 pips with no additional commission charges. Spreads on CFD indices start at 0.4 points. The information on this site is not directed at residents in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.
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.
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.