After yesterday’s moderate rise that brought gold above $ 1,800, technical selling pressure caused gold to fall below $ 1,800. Yesterday, the Bureau of Labor Statistics released its August inflation report, which indicated that the CPI (consumer price index) rose 0.3% last month. The rise in August inflationary pressures came as estimates by economists surveyed by the Wall Street Journal, who expected a 0.4% increase. The report from the Bureau of Labor Statistics indicated that inflationary pressures continue to prevail and remain at a high level, bringing the CPI index to 5.3% over the last twelve months.
Today’s sales seem to have been the result of technical sales pressure. The fact that gold closed yesterday below the 200-day moving average, which is the first level of technical resistance, and opened today below that price, was enough for short-term traders to get benefits.
Reuters reported that David Meger, director of metal trading at High Ridge Futures, said: Meger added that “any good news is bad news for gold,” and if more positive economic data is released, the Fed would be more willing to start reducing it. the purchase of assets and gold is likely to move sideways towards the FOMC meeting. “
Gold remains limited in rank and could continue to trade sideways until the conclusion of the Federal Reserve’s September FOMC meeting on the 22nd of the month. Market participants expect more clarity as to the Federal Reserve’s timetable to start shrinking. It is currently believed that the Fed will not announce when it will begin to shrink until the November FOMC meeting. One of the only participants in the components market will focus on this month’s FOMC meeting and get information on the publication of a revised “points plot”, which will include expected interest rates (Fed fund rates ) until 2024.
Given that we did see gold return yesterday’s movement gains above $ 1,800, the risk for any major continuation of the sale is limited. Saxo bank analyst Ole Hansen said: “The risk for gold down is also limited, as the slowdown in inflation slows the pace at which time reduction can be carried out.” .
The only thing that seems to be extremely clear is that traders and market participants expect more information from the Federal Reserve when the FOMC meeting ends exactly one week from today. Until then, we could see the gold trade sideways and consolidate just below or above $ 1800 per ounce.
For more information, use this link.
I wish you, as always, good trade and good health,
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure the accuracy of the information provided; however, neither Kitco Metals Inc. nor can the author guarantee this accuracy. This article is for informational purposes only. This is not a request for any exchange of goods, securities or other financial instruments. Kitco Metals Inc. and the author of this article does not accept guilt for loss and / or damage resulting from the use of this publication.