Gold remains stable below the weekly high and is set to rise higher.
The gold price (XAUUSD) struggles to capitalize on its two-day weekly advances. And oscillates in a narrow trading band throughout the Asian session on Wednesday. The US Dollar (USD) rises slightly, recouping some of the previous day’s decline to its lowest level since September 1. Aside from that, a generally upbeat tone in the equity markets appears to be another influence. This is operating as a headwind for the safe-haven precious metal.
Bets that the Fed will stop rising interest rates keep the USD weak and lend some support.
However, predictions that the Federal Reserve (Fed) would stop raising interest rates keep a lid on any major USD rise. And continue to support the non-yielding Gold price. This means that the path of least resistance for the XAUUSD is to the upside. Supporting possibilities for an extension of the recent rally from the 200-day Simple Moving Average (SMA), around $1,930, or its lowest level since October 18 reached on Monday.
Daily Market Movers: The gold price is still being supported by dovish Fed forecasts, which are being bolstered by worse US CPI statistics.
The US Bureau of Labor Statistics (BLS) stated on Tuesday. That the headline Consumer Price Index (CPI) remained steady in October. While the annual rate rose at its slowest pace in two years, slowing to 3.2% from 3.7% in September.
The report supports predictions that the Federal Reserve (Fed) has reached the end of its policy tightening cycle. And raises betting on a rate drop in May 2024, triggering an overnight sharp decline in US Treasury bond yields.
The benchmark 10-year US government bond yield is approaching a two-month low. Maintaining the US Dollar near its lowest level since September 1 and providing some support to the non-yielding Gold price.
The widespread risk-on sentiment is considered as a headwind for the safe-haven precious metal. Despite the fact that the fundamental backdrop favors optimistic traders. And signals that the route of least resistance remains. On the bright side.
China’s Industrial Production increased by 4.6% year on year in October. Exceeding the 4.5% increase in the previous month and the consensus estimate, while monthly Retail Sales increased by 7.4% year on year.
Fixed Asset Investment in China increased by 2.9% year on year during the reporting month, compared to the 3.1% expected and September reading. The data has minimal impact on market sentiment or provides any momentum.
Market traders are now looking for the release of the US Producer Price Index (PPI).
Market traders are now looking for short-term possibilities in the release of the US Producer Price Index (PPI) and monthly Retail Sales numbers later this Wednesday during the early North American session.
The headline PPI in the United States is expected to climb by 0.1% in October, down from 0.5% the previous month. The yearly rate is predicted to slip below 2.0%, while the core PPI is expected to mirror September’s values.
Retail sales in the United States are predicted to fall by 0.3% in October, following a 0.7% increase the previous month, while sales excluding autos are expected to remain steady MoM.
