Gold price awaits fresh direction as US PPI looms
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Gold prices opened Tuesday’s European session with a modest recovery, buoyed by a pullback in US bond yields. However, the precious metal remains confined below the one-month high reached on Monday, as market participants await the release of the US Producer Price Index (PPI) for new impetus.
Market sentiment balances between bond yields and Fed outlook
Recent developments in the US have influenced gold’s price action. Reports indicate that President-elect Donald Trump’s advisors are considering a gradual tariff implementation strategy to mitigate inflation risks. This has momentarily softened US Treasury yields, providing some relief to gold. Nonetheless, optimism around Trump’s economic approach and easing fears of disruptive trade policies have bolstered investor confidence, which, in turn, supports the US dollar.
The upbeat US Nonfarm Payrolls (NFP) report from last Friday reinforced expectations that the Federal Reserve will adopt a measured approach to rate cuts. This hawkish stance has capped the upside potential for gold, a non-yielding asset, while lending strength to the dollar.
Technical indicators highlight key levels for gold traders
Gold’s near-term trajectory hinges on critical price levels. On the upside, resistance is anticipated around the $2,676-$2,677 range, with stronger barriers near $2,690 and $2,700. A sustained break beyond these points could pave the way for a rally towards the $2,716-$2,717 zone, with potential to test the December swing high of $2,726.
Conversely, immediate support is anchored at the $2,657-$2,656 region, which marked Monday’s low. A breach below this threshold could accelerate a downward move towards $2,635, and possibly extend to $2,610, where technical confluences such as the 100-day SMA and a multi-week trendline converge.
Focus shifts to inflation data for market direction
The release of the US PPI later today and the Consumer Price Index (CPI) tomorrow are poised to play pivotal roles in shaping market sentiment. These inflation indicators will provide clarity on the Federal Reserve’s policy trajectory, thereby influencing both US Treasury yields and the gold market.
While gold remains resilient amidst mixed drivers, its ability to sustain momentum depends largely on forthcoming macroeconomic data and evolving geopolitical developments.
Market sentiment balances between bond yields and Fed outlook
Recent developments in the US have influenced gold’s price action. Reports indicate that President-elect Donald Trump’s advisors are considering a gradual tariff implementation strategy to mitigate inflation risks. This has momentarily softened US Treasury yields, providing some relief to gold. Nonetheless, optimism around Trump’s economic approach and easing fears of disruptive trade policies have bolstered investor confidence, which, in turn, supports the US dollar.
The upbeat US Nonfarm Payrolls (NFP) report from last Friday reinforced expectations that the Federal Reserve will adopt a measured approach to rate cuts. This hawkish stance has capped the upside potential for gold, a non-yielding asset, while lending strength to the dollar.
Technical indicators highlight key levels for gold traders
Gold’s near-term trajectory hinges on critical price levels. On the upside, resistance is anticipated around the $2,676-$2,677 range, with stronger barriers near $2,690 and $2,700. A sustained break beyond these points could pave the way for a rally towards the $2,716-$2,717 zone, with potential to test the December swing high of $2,726.
Conversely, immediate support is anchored at the $2,657-$2,656 region, which marked Monday’s low. A breach below this threshold could accelerate a downward move towards $2,635, and possibly extend to $2,610, where technical confluences such as the 100-day SMA and a multi-week trendline converge.
Focus shifts to inflation data for market direction
The release of the US PPI later today and the Consumer Price Index (CPI) tomorrow are poised to play pivotal roles in shaping market sentiment. These inflation indicators will provide clarity on the Federal Reserve’s policy trajectory, thereby influencing both US Treasury yields and the gold market.
While gold remains resilient amidst mixed drivers, its ability to sustain momentum depends largely on forthcoming macroeconomic data and evolving geopolitical developments.