Price of Gold Fundamental Daily Forecast – PPI Downside Miss Could Spike Gold Prices $10 Higher

Today’s U.S. Producer Price Index (PPI) report could move the gold market. It is expected to show a monthly increase of 0.2%, up from the previously reported -0.1%. Core PPI is also expected to show a rise of 0.2%, also up from -0.1%.
James Hyerczyk
Gold Bars and Dollar
Gold Bars and Dollar

Gold is trading higher early Wednesday but inside yesterday’s range. This suggests investor indecision and impending volatility. It could also be an indication of a transition in consumer sentiment from bearish to bullish.

The catalysts underpinning gold prices are lower Treasury yields and a weaker U.S. Dollar. A recovery in the Euro is also helping to support gold prices.

At 0543 GMT, December Comex Gold is trading $1193.60, up $2.10 or +0.18%.

U.S. 10-year and 30-year Treasury yields fell on Tuesday in choppy trading, as investors took profits and covered shorts in T-note and T-bond futures markets. Earlier in the day, yields hit multi-year highs following recent economic data and on interest rate prospects over the next 18 months.

In other news, the IMF cut global economic growth forecasts for 2018 and 2019, as well as its U.S. and China estimates for next year, saying the two countries would feel the brunt of their trade war next year.

In economic news, it was another light day on Tuesday with the NFIB Small Business Index coming in at 107.9, below the 108.9 forecast. The IBD/TIPP Economic Optimism reading was 57.8, well above the 54.6 estimate.


Today’s U.S. Producer Price Index (PPI) report could move the gold market. It is expected to show a monthly increase of 0.2%, up from the previously reported -0.1%. Core PPI is also expected to show a rise of 0.2%, also up from -0.1%.

Final Wholesale Inventories are estimated to have risen 0.8%. The Treasury also holds a 10-year auction today. Additionally, the Treasury could release its Currency Report, in which it is expected to name currency manipulators.

Traders will be watching the PPI data because it needs to justify the surge in Treasury yields. Lower than expected PPI could drive Treasury yields lower. This would pressure the U.S. Dollar which would make dollar-denominated gold a more attractive investment.

The daily chart indicates that taking out $1195.40 with strong buying volume could spike the market about $10 higher, or into $1205.90.

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
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.
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.