FXEMPIRE
All

Price of Gold Fundamental Daily Forecast – Traders Eyeing U.S. Consumer Inflation Reports

Steady-to-better inflation data is likely to keep a lid on gold prices, while weaker-than-expected figures could encourage some short-covering. The movement in gold will be determined by how investors feel the Fed will react to the data.
James Hyerczyk
Comex Gold

Gold is trading lower on Tuesday, but rebounding from early session weakness that drove the market to $1536.40, just slightly above the top of a value zone we had identified as an attractive area for buyers.

Earlier in the session, gold prices fell to their lowest level in nearly two weeks amid increased appetite for risky assets in response to stronger-than-expected China economic data and the signing of the preliminary U.S.-China trade deal on January 15. Gold was also pressured by the news that the U.S. was removing China’s label as a currency manipulator.

At 10:05 GMT, February Comex gold is trading $1545.50, down $5.10 or -0.33%.

US Removes China from Currency Manipulator List Ahead of Trade Deal Signing

The United States removed China from a list of countries considered currency manipulators just two days before top trade negotiators for Washington and Beijing sign a key “phase one” trade deal, the Treasury Department announced Monday.

 

China’s Dollar-Denominated Exports and Imports Beat Expectations in December

China’s dollar-denominated exports and imports were both higher in December, Reuters reported citing data from the General Administration of Customs.

In December, dollar-denominated exports rose 7.6% on-year, against a 1.3% drop in November. December imports were 16.3% higher from a year ago, Reuters reported citing data from the Chinese customs. Economists polled by Reuters had expected dollar-denominated exports to rise 3.2% on-year and imports to rise 9.6% in the same period.

Daily Forecast

A slight dip in U.S. Treasury yields is likely behind the mild turnaround in the gold market. At the same time, firmer U.S. equity markets and a steady U.S. Dollar may be capping gains. However, technical chart-watchers coming in at $1536.40, just slightly above the 50% level at $1533.20 should also be considered as a reason behind the intraday rebound.

Fundamentally, the key event today is the release of the report on U.S. consumer inflation. The Consumer Price Index is expected to have risen by 0.3% and Core Consumer Inflation is expected to have risen by 0.2%.

“Core CPI should remain solid in the next few months and easy base comparisons should support the YoY reading,” Credit Suisse wrote in a note to clients January 9. “With the December tariffs on consumer goods cancelled and limited wage pressure, we don’t expect a meaningful break higher in core inflation. The FOMC are likely to be more sensitive to downside surprises in the months ahead, given persistent below-target inflation and falling inflation expectations.”

Steady-to-better inflation data is likely to keep a lid on gold prices, while weaker-than-expected figures could encourage some short-covering. The movement in gold will be determined by how investors feel the Fed will react to the data.

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
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