Key Highlights
- Gold price started an upside correction from the $1265 swing low against the US Dollar.
- There is a crucial ascending channel forming with support near $1274 on the 4-hours chart of XAU/USD.
- The US Consumer Price Index in Oct 2017 increased 2% (YoY), similar to the market forecast.
- Today, the US Industrial Production for Oct 2017 will be released, which is forecasted to increase by 0.5% (MoM).
Gold Price Technical Analysis
Gold price has started a decent uptrend from the $1270 low against the US Dollar. It has to move above $1290 and $1300 level to gain further momentum.
Looking at the 4-hours chart of XAU/USD, there is a crucial ascending channel forming with support near $1274. The price is currently above the 100 simple moving average (red, 4-hour) and $1276, which is a positive sign.
A successful close above the channel resistance at $1290 would open the doors for more gains toward $1300 and $1310 in the near term.
On the downside, important support can be seen at $1280 and $1274. The 4-hour RSI is just below the 50 level and signaling a neutral bias in the short term for gold price as long as it stays above $1274.
US Consumer Price Index
Recently in the US, the Consumer Price Index for Oct 2017 was released by the US Bureau of Labor Statistics. The forecast was lined up for the CPI to increase by 2% compared with the same month a year ago.
The actual result in line with the forecast since Oct’s CPI was +2%. Looking at the monthly change, there was a rise of 0.1% in the CPI, similar to the forecast. On the other hand, the Consumer Price Index Ex Food & Energy in Oct 2017 rose 1.8% (YoY), more than the forecast of +1.7%.
The report added:
The shelter index increased 0.3 percent and was the main factor in the seasonally adjusted all items increase. The energy index fell, as a decline in the gasoline index outweighed increases in other energy component indexes. The food index was unchanged over the month.
Overall, the result was neutral, which increases the risk of more gains in gold price above $1290 in the near term.
Economic Releases to Watch Today
UK Retail Sales for Oct 2017 (YoY) – Forecast -0.6%, versus +1.2% previous.
UK Retail Sales for Oct 2017 (MoM) – Forecast +0.1%, versus -0.8% previous.
Euro Zone CPI for Oct 2017 (YoY) – Forecast +1.4%, versus +1.4% previous.
Euro Zone CPI for Oct 2017 (MoM) – Forecast +0.1%, versus +0.4% previous.
US Industrial Production Oct 2017 (MoM) – Forecast +0.5%, versus +0.3% previous.
US Capacity Utilization Oct 2017 – Forecast 76.3%, versus 76.0% previous.
