• Resurgent USD demand keeps exerting some downward pressure.
• Fed rate hike expectations further contributed to the weaker tone.
• Risk-off mood extends some support and helps limit deeper losses.
• Today’s US CPI might assist determine the next leg of directional move.
Gold traded with a mild negative bias for the second consecutive session but remained within a narrow trading range held over the past one week or so.
The commodity's attempted up-move on Thursday quickly fizzled out, with a combination of negative forces prompting some fresh selling from closer to weekly tops. Chicago Fed President Charles Evans' hawkish comments, reaffirming prospects for gradual Fed rate hike path through the end of 2018, triggered a fresh leg of US Dollar upsurge and eventually prompted some fresh selling around the non-yielding yellow metal.
A strong follow-through USD buying interest kept exerting downward pressure on the dollar-denominated commodity, albeit the prevailing risk-off mood, as depicted by a sea of red across global equity markets, underpinned the precious metal's safe-haven appeal and helped limit deeper losses, at least for the time being.
Moving ahead, today's important release of the latest US consumer inflation figures will now be looked upon for the required momentum, which could assist the commodity to finally breakthrough its near-term consolidative range.
Technical Analysis
The near-term range-bound price action constituted towards the formation of a rectangular chart pattern on the 1-hourly chart, suggesting a brief pause in the trend. The pattern, however, is not complete until a decisive breakout in either direction has occurred and hence, it would be prudent to wait before positioning for a firm near-term direction.
A convincing break below the $1206-05 region might turn the metal vulnerable to break below the $1200 handle and head towards testing March 2017 lows, around the $1295 level. Alternatively, a sustained move beyond $1217-18 area (trading range resistance) is likely to trigger a short-covering bounce towards $1223-24 intermediate hurdle en-route $1231-32 supply zone.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD treads water just above 1.0400 post-US data
Another sign of the good health of the US economy came in response to firm flash US Manufacturing and Services PMIs, which in turn reinforced further the already strong performance of the US Dollar, relegating EUR/USD to the 1.0400 neighbourhood on Friday.
GBP/USD remains depressed near 1.2520 on stronger Dollar
Poor results from the UK docket kept the British pound on the back foot on Thursday, hovering around the low-1.2500s in a context of generalized weakness in the risk-linked galaxy vs. another outstanding day in the Greenback.
Gold keeps the bid bias unchanged near $2,700
Persistent safe haven demand continues to prop up the march north in Gold prices so far on Friday, hitting new two-week tops past the key $2,700 mark per troy ounce despite extra strength in the Greenback and mixed US yields.
Geopolitics back on the radar
Rising tensions between Russia and Ukraine caused renewed unease in the markets this week. Putin signed an amendment to Russian nuclear doctrine, which allows Russia to use nuclear weapons for retaliating against strikes carried out with conventional weapons.
Eurozone PMI sounds the alarm about growth once more
The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.