GOLD defends 50-day SMA ahead of US PPI inflation data
Gold price attempts a tepid bounce early Wednesday as focus shifts to trade updates and US PPI data.
The US Dollar retreats alongside Treasury bond yields even as risk-off flows persist.
Gold price needs to crack the 50-day SMA support at $3,323; daily RSI reclaims midline.
Gold price is replicating the tepid recovery moves seen in the first half of Tuesday’s trading as buyers try their luck the third time early Wednesday, heading into the US PPI inflation test.
Despite the latest uptick, Gold price appears to lack bullish conviction as the USD remains in an upside consolidative mode against its major currency rivals, having risen for the seventh consecutive day on Tuesday.
The USD resumed its uptrend, capitalizing on the rally in the 10-year benchmark US Treasury bond yields after the US CPI accelerated in June, moving away from the Fed 2% inflation target.
The June CPI increased 0.3% on the month, driving the 12-month inflation rate to 2.7%, in line with expectations. The core figures also rose 0.2% over the month and 2.9% annually, but undermined estimates.
The uptick in US inflation bolstered bets for an extended pause by the Fed for a longer period than initially expected, with the odds of a September Fed rate cut falling to about 52% from nearly 60% pre-data release, per the CME Group’s FedWatch Tool.
Hawkish Fed expectations combined with US President Donald Trump’s announcement of a trade deal with Indonesia helped the USD keep the upper hand, fuelling a fresh decline in the non-interest-bearing Gold price.
The US yields and the USD also tracked the advance in the Japanese government bond yields and the USD/JPY pair as the Asian nation’s bond market and the local currency suffered extensively on heightening fiscal and political concerns.
However, America’s AI pioneer’s, Nvidia, headlines-driven tech rally curbed the USD uptrend, offering some support to the gold.
In Wednesday’s trading so far, uncertainty over Trump’s trade policy and Powell’s tenure as a Fed Chairman act as headwind to the Greenback, allowing Gold price to come up for some air.
Looking ahead, it remains to be seen if Gold price can sustain the bounce as traders refrain from creating fresh positions ahead of the US PPI data.If the June US PPI comes in hotter than the expected 2.5% print over the year, while the monthly PPI also above 0.2% forecast, a fresh leg higher in the USD cannot be ruled out at the expense of Gold price.
Meanwhile, developments on the trade front will continue to play a pivotal role in driving risk sentiment, especially after Trump announced late Tuesday that he will send letters notifying smaller countries of their US tariff rates, per Reuters.
Daily technical analysis
As observed on the daily chart, Gold price is stuck between two key barriers, with the 21-day SMA support-turned-resistance at $3,335 checking the upside.
On the other hand, the 50-day SMA at $3,323 cushions the downside.
The 14-day RSI is sitting just above the midline, currently near 50.50, suggesting that buyers could retain control.Acceptance above the 21-day SMA is critical to sustaining the renewed upside, above which the 23.6% Fibo level of the April record rally at $3377 will be put to the test once again.
Further north, the $3,400 round level will challenge bearish commitments.
In contrast, rejection at the 21-day SMA could attack the 50-day SMA support.
Sellers must find a strong foothold below the 50-day SMA on daily closing basis.The next healthy support levels are located at the 38.2% Fibo level of the same rally at $3,297 and the July low of $3,283.
GOLD defends 50-day SMA ahead of US PPI inflation data
Gold price is replicating the tepid recovery moves seen in the first half of Tuesday’s trading as buyers try their luck the third time early Wednesday, heading into the US PPI inflation test.
Despite the latest uptick, Gold price appears to lack bullish conviction as the USD remains in an upside consolidative mode against its major currency rivals, having risen for the seventh consecutive day on Tuesday.
The USD resumed its uptrend, capitalizing on the rally in the 10-year benchmark US Treasury bond yields after the US CPI accelerated in June, moving away from the Fed 2% inflation target.
The June CPI increased 0.3% on the month, driving the 12-month inflation rate to 2.7%, in line with expectations. The core figures also rose 0.2% over the month and 2.9% annually, but undermined estimates.
The uptick in US inflation bolstered bets for an extended pause by the Fed for a longer period than initially expected, with the odds of a September Fed rate cut falling to about 52% from nearly 60% pre-data release, per the CME Group’s FedWatch Tool.
Hawkish Fed expectations combined with US President Donald Trump’s announcement of a trade deal with Indonesia helped the USD keep the upper hand, fuelling a fresh decline in the non-interest-bearing Gold price.
The US yields and the USD also tracked the advance in the Japanese government bond yields and the USD/JPY pair as the Asian nation’s bond market and the local currency suffered extensively on heightening fiscal and political concerns.
However, America’s AI pioneer’s, Nvidia, headlines-driven tech rally curbed the USD uptrend, offering some support to the gold.
In Wednesday’s trading so far, uncertainty over Trump’s trade policy and Powell’s tenure as a Fed Chairman act as headwind to the Greenback, allowing Gold price to come up for some air.
Looking ahead, it remains to be seen if Gold price can sustain the bounce as traders refrain from creating fresh positions ahead of the US PPI data.If the June US PPI comes in hotter than the expected 2.5% print over the year, while the monthly PPI also above 0.2% forecast, a fresh leg higher in the USD cannot be ruled out at the expense of Gold price.
Meanwhile, developments on the trade front will continue to play a pivotal role in driving risk sentiment, especially after Trump announced late Tuesday that he will send letters notifying smaller countries of their US tariff rates, per Reuters.
Daily technical analysis
As observed on the daily chart, Gold price is stuck between two key barriers, with the 21-day SMA support-turned-resistance at $3,335 checking the upside.
On the other hand, the 50-day SMA at $3,323 cushions the downside.
The 14-day RSI is sitting just above the midline, currently near 50.50, suggesting that buyers could retain control.Acceptance above the 21-day SMA is critical to sustaining the renewed upside, above which the 23.6% Fibo level of the April record rally at $3377 will be put to the test once again.
Further north, the $3,400 round level will challenge bearish commitments.
In contrast, rejection at the 21-day SMA could attack the 50-day SMA support.
Sellers must find a strong foothold below the 50-day SMA on daily closing basis.The next healthy support levels are located at the 38.2% Fibo level of the same rally at $3,297 and the July low of $3,283.
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