Gold Climb As Dollar softens – Ahead of U.S. Inflation Data
Gold prices continued higher on Wednesday, as investors looked ahead to U.S. inflation data to gauge how it will impact the Federal Reserve’s view on monetary policy in the months ahead.
Gold was up around 0.23%, at $1,333.80 a troy ounce by 11:29 AM GMT. It reached its best level since Feb. 6 at $1,339.40 earlier in the session.
Global markets from commodities to equities to bonds were whipsawed last week after the Feb. 2 wage data spurred investors to reappraise the outlook for global inflation and weigh consequences for monetary policy and asset valuations. Bullion fell as share markets tumbled, but has regained some ground since Monday. New Federal Reserve Chairman Jerome Powell has suggested the central bank will push ahead with hikes even as it remains on the lookout for threats to the financial system in the wake of the selloff.
“Gold’s reaction to inflation data is profoundly hard to predict,” said Barnabas Gan, an economist at Oversea-Chinese Banking Corp. “Given how markets have been pricing in more Fed rate hikes into 2018, faster-than-expected inflation pressures would likely persuade higher policy rates across key central banks and pressure prices lower, rather than lift gold’s status as an inflation hedge.”
On the technical charts, Gold is trading sideways, above all the moving averages (9 day, 20 day, 50 day, 100 day and 200 day). The RSI is at 51.87 and the MACD is below the signal line.
Buy stop at 1333.52, Take profit at 1338.5, Stop loss at 1328