Gold Hits Fresh YTD Lows
Gold Under Pressure
Gold prices are attempting to recover today after heavy selling yesterday in response to the latest US inflation data. Headline annualised CPI was seen rising to 4.2% last month, up from 3.8% prior, now back at its highest level since May 2023. Fed rate hike expectations strengthened again in response to the data with market pricing for a hike in October jumping to around 60% from around 50% prior to the data and pricing for a hike by year end holding around 70%. A slightly weaker-than-forecast monthly core CPI reading looks to be the only thing preventing a fresh breakout in USD today, helping gold prices rebound for now. However, with the picture still firmly hawkish for the Fed, USD looks poised to push higher keeping gold at risk of a fresh breakdown near-term. Looking ahead, today’s PPI data could add further pressure for gold if we see any upside surprise in the readings.
US/Iran Tensions
Alongside yesterday’s inflation news, gold prices have also come under pressure amidst heightened uncertainty over the US/Iran peace process following news of further attacks between the US and Iran. Both sides are warning of heavier attacks to follow unless the other backs down. As such, the situation remains highly precarious and with USD likely to retain safe haven support against this backdrop, gold prices should remain anchored lower.
Technical Views
Gold
The sell off in gold has seen the market breaking down below the 4,092.60 level to trade fresh YTD lows. Price is attempting to reclaim the level today, but the move looks weak and risks remain skewed towards a deeper push down to the 3,898.03-level next.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.