Gold Rises As US Inflation Points To Fed Easing

Fundamental Analysis

* US Disinflation: The gold price has risen against the dollar following the release of crucial inflation numbers in the United States. The US Bureau of Labor Statistics (BLS) reported that headline CPI was 0.3% MoM, a tenth more than expected but in line with predictions. Core CPI remained constant at 0.3% MoM, in line with October and Wall Street estimates. Expectations that the Federal Reserve (Fed) will drop interest rates next week were reiterated as the disinflationary process progresses, albeit at a slower pace. Following the data, the swaps market priced a 92% chance that the Federal Reserve will decrease interest rates by 25 basis points (bps). This would lower the Fed funds rate to 4.25%-4.50% during the December 17-18 meeting.

Technical Analysis

* Technical Breakout: Gold price was traded higher following prior breakout above the resistance level 2707.00. MACD which illustrate persistent bullish bias signal suggest the commodity to likely further extend its gains.

* Resistance and Support: If the bullish momentum persists, there’s a strong likelihood that the price will potentially head towards the level 2792.00. Conversely, a potential reversal is also to be expected and the price could head back towards 2620.00 after it breach back below the level 2707.00.

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Potential Risks

Looking ahead, investors’ focus will shift to the release of the Producer Price Index (PPI) and Initial Jobless Claims numbers for the week ending December 7 since the CPI figures are in the rearview mirror.

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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.