Support
Dollar gains ground on higher CPI data
The annual inflation rate in US accelerated to 3.4% in December, compared to 3.1% in November
Gold prices held steady around $2031 for three days before the release of inflation data, which showed a rise in the annual rate to 3.4% in December.
The reaction to the news led to a sharp fall in gold prices, hitting lows of $2024, followed by a recovery to hover around $2030.
Support and resistance levels are at 2,016, 1,998, 1,987, and 2,040, 2,052, 2,065, respectively.
On the Market Watch!
Gold
Gold prices remained consistently around $2031 for three consecutive days, leading up to the release of inflation numbers. The annual inflation rate in US accelerated to 3.4% in December, compared to 3.1% in November, while the core index slowed down during the same period by 3.9% down from 4%, and monthly, the index remained unchanged at 0.3%.
Prices sharply fell as a reaction to the news hitting lows of $2024, only to hover again near $2030. The next support levels are 2,016, 1,998, 1,987 and Resistance at 2,040 2,052, 2,065.
The yellow metal took a U-turn on the 28th of December with a bearish divergence as risk sentiment increased on the back of the projected rate cuts to start in March. As uncertainty mounts regarding the timing of the first rate cut, gold prices have been a little rocky.
The dollar’s reaction on the other hand weakened in the European session but recovered quickly after the release.
The GBP/USD
The Sterling inched higher this Thursday, hovering around 1.2749 ahead of a slew or market data tomorrow including the GDP m/m which is expected to rise to 0.2% from a negative 0.3%.
Industrial production data is also expected to rise to 0.3% vs -0.8% previous. Whilst Manufacturing data is also expected to rise to 0.3% compared to -1.1% in November.
