Gold Price Slips Following U.S CPI Data

Fundamental Analysis

* Gold Slide: Gold prices which trading against the greenback have edged lower as markets absorbed the U.S. inflation data released on Wednesday. The Labor Department reported that U.S. inflation in July met expectations, with the headline Consumer Price Index (CPI) rising 0.2% month-over-month, resulting in a 2.9% annual inflation rate. The core CPI, which excludes food and energy, also increased by 0.2% month-over-month and showed a 3.2% annual rate, aligning with forecasts. In response to the data, market expectations have shifted towards a smaller rate cut, with the CME FedWatch Tool indicating a 41% chance of a 50 basis point cut by the Fed in September, down from 50% before the CPI report.

Technical Analysis

* Technical Breakout: Gold price have traded lower following recent breakout below the level 2450.00. MACD which illustrate bearish momentum signal with the formation of death cross suggest the commodity to likely extend its losses.

* Resistance and Support: If the bearish momentum persists, there’s a strong likelihood that the price will potentially head towards 2418.00. Conversely, a potential reversal is also to be expected and the price could head back towards 2482.00 after it breach back above the level 2450.00.

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Potential Risks

* Looking ahead, investors will take more cues from US Retail Sales, weekly Initial Jobless Claims, the Philly Fed Manufacturing Index and Industrial Production, which are due later on Thursday.

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Monitoring

Stay updated on US data, central bank updates and any shifts in the US Dollar’s strength by following PU Prime’s market insights and daily financial news.

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Disclaimer: Trading derivatives involves high risks, and market conditions can change rapidly. The content is for informational purposes only and should not be considered as financial advice. Traders should conduct their own research and consider risk management strategies.