Skip to Content
News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
More View More
Gold Price Struggles to Push Above October High Ahead of US CPI

Gold Price Struggles to Push Above October High Ahead of US CPI

David Song, Strategist

Gold Price Talking Points

The price of gold climbs to a fresh monthly high ($1723) as it extends the advance following the US Non-Farm Payrolls (NFP) report, but the recent rise in the precious metal may unravel if it fails to push above the October high ($1730).

Gold Forecast
Gold Forecast
Recommended by David Song
Get Your Free Gold Forecast
Get My Guide

Gold Price Struggles to Push Above October High Ahead of US CPI

The price of gold trades above the 50-Day SMA ($1673) after defending the yearly low ($1615), and bullion may no longer respond to the negative slope in the moving average as it clears the opening range for November.

At the same time, the update to the US Consumer Price Index (CPI) may influence the near-term outlook for bullion as both the headline and core reading are expected to narrow in October, and signs of slowing inflation may push the Federal Reserve to adjust its approach in managing monetary policy in an effort to foster a soft-landing for the economy.

As a result, speculation for a smaller Fed rate hike may prop up the price of gold ahead of the next interest rate decision on December 14, but evidence of sticky inflation may put pressure on the Federal Open Market Committee (FOMC) to pursue a highly restrictive policy as Chairman Jerome Powell insists that “it's very premature in my view to think about or be talking about pausing our rate hike.”

In turn, a stronger-than-expected CPI print may drag on bullion as it encourages the FOMC to implement another 75bp rate hike in December, and it remains to be seen if Fed officials will project a steeper path for US interest rates with the central bank slated to update the Summary of Economic Projections (SEP) at its last meeting for 2022.

With that said, a downtick in both the headline and core US CPI may lead to a further rise in the price of gold as it fuels speculation for a smaller Fed rate hike, but the precious metal may struggle to retain the advance from earlier this month if it fails to clear the October high ($1730).

Gold Price Daily Chart

Source: Trading View

  • The price of gold clears the opening range for November after defending the yearly low ($1615), and the precious metal may no longer respond to the negative slope in the 50-Day SMA ($1673) as it holds above the moving average.
  • A break/close above the $1726 (38.2% retracement) may push the price of gold above the October high ($1730), with a move above the September high ($1735) opening up the $1762 (78.6% expansion) to $1763 (50% retracement) region.
  • However, failure to clear the October high ($1730) may push the price of gold back towards the $1690 (61.8% retracement) to $1695 (61.8% expansion) area, with the next region of interest coming in around $1670 (50% expansion).

Trading Strategies and Risk Management

Becoming a Better Trader

Recommended by David Song

Start Course

--- Written by David Song, Currency Strategist

Follow me on Twitter at @DavidJSong

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES