Gold meanders after quiet session

2023-11-16
Summary:

Flat gold prices in early Asian hours on Thursday were due to a robust dollar, despite economic data easing worries of additional rate hikes.

Gold prices were flat in early Asian hours on Thursday, weighed by a stronger dollar, but more economic data came in against concerns that more rate hikes might be needed.

US retail sales fell for the first time in seven months in October though it was a smaller decline than economists were expecting. That points to slowing demand at the start of the fourth quarter.


Producer prices fell by the most in 3.5 years in October amid a sharp drop in the cost of gasoline. It was much worse than economist forecast for a meagre gain of 0.1%.


Traders widely expect the Fed to leave rates unchanged in December and bet it will start cutting rates by May despite Powell’s call for caution with claiming victory on inflation, according to the CME FedWatch tool.


Investors are currently less attentive to the war between Israel and Hamas which erupted after Oct. Bullion crossed the $2000 level on the heels of the Russian invasion, banking crisis, and Hamas attacks.


Energy prices retreated from their highs, which helped ease price pressures and hasten potential rate cuts. Historically gold tends to rise in a loosening cycle.

XAUUSD

Gold trades around $1960, struggling to push much higher given risk-on mood. Meanwhile the 200 MA seems a strong prop which has not been tested since mid-Oct.


Disclaimer: This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by EBC or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.

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