|

Gold spikes to 4-week tops but fails to extend the momentum

   •  Hits 4-week tops on persistent USD selling bias/risk-off mood.
   •  December Fed rate hike expectations cap additional gains. 

Gold quickly reversed the US macro data-led bullish spike to 4-week tops but has still managed to hold in positive territory for the second consecutive session.

The yellow metal jumped to an intraday high near the $1290 region following the release of US economic reports on retail sales and inflation. The market seemed unimpressed by today's macro data, with persistent US Dollar weakness benefitting dollar-denominated commodities – like gold. 

   •  US: CPI for all items increases 0.1% in October as shelter index rises
   •  US: Retail and food services sales for Oct. 2017 were $486.6 billion, an increase of 0.2% from Sep.

The data, however, was also seen having little monetary policy implication. In fact, the probability for a December Fed rate hike move remains above 90%, according to the CME Group's FedWatch Tool, and eventually kept a lid on any follow through up-move for the non-yielding metal.

Meanwhile, the prevalent risk-off environment, as depicted by a sea of red across global equity markets, underpinned demand for traditional safe-haven assets and helped the precious metal to maintain positive bias through the early NA session.

Technical levels to watch

A follow-through momentum beyond $1290 level is likely to accelerate the up-move towards $1295 intermediate hurdle en-route the key $1300 handle. On the downside, any meaningful retracement below $1284 level is likely to find support near the $1280 level, which is closely followed by 100-day SMA support near the $1278 region.
 

Author

Haresh Menghani

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

More from Haresh Menghani
Share:

Editor's Picks

EUR/USD weakens toward 1.1600 as firm US data revives the US Dollar

The EUR/USD edged lower on Thursday, down some 0.21% as market sentiment remains risk averse due to the ongoing conflict in the Middle East. This and solid US economic data pushed the pair lower towards the 1.1600 figure ahead of Friday’s session.

GBP/USD drifts lower heading into NFP range

GBP/USD edged lower by 0.2% on Thursday, settling close to 1.3350 in a strained trading session that kept the pair pinned near three-month lows. Price briefly recovered earlier in the day on reports that Iran had indirectly signaled openness to talks with the CIA, but the bounce faded as Israeli officials reportedly advised Washington to disregard the overture. 

Gold slumps below $5,100 as US Dollar gains

Gold price tumbles to near $5,085 during the early Asian session on Friday. The precious metal loses ground amid a stronger US Dollar. The US employment report for February will take center stage later on Friday. 

NYSE parent Intercontinental Exchange partners with OKX, invests at a $25B valuation

OKX announced an investment from Intercontinental Exchange, raising its valuation to $25 billion, alongside a partnership to expand regulated crypto futures and tokenized equity offerings globally.

Two PMIs, two Chinas

China’s economic data are often treated with a degree of caution by global investors. The challenge is not necessarily that the numbers are incorrect, but that they can describe very different parts of a vast and complex economy. Nowhere is that more evident than in China’s PMIs.

Ripple tests recovery strength amid steady ETF inflows, growing retail interest

Ripple (XRP) continues to demonstrate notable resilience as the cryptocurrency market navigates the persistent war in the Middle East after the United States (US) and Israel attacked Iran on Saturday.