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Gold Punches Past $1300 as CPI Misses Estimate

Gold prices have posted gains in Friday’s North American session. Currently, the spot price for an ounce of gold is $1300.97, up 0.57% on the day. On the release front, CPI gained 0.5%, short of the estimate of 0.6%. Core CPI posted a small gain of 0.1%, shy of the forecast of 0.2%. Retail sales data was a mix, as Core Retail Sales gained 1.0%, above the estimate of 0.9%. However, retail sales were up 1.6%, short of the forecast of 1.7%. Later in the day, we’ll get a look at UoM Consumer Confidence, which is expected to improve to edge lower to 95.1 points.

A strong US economy hasn’t led to higher inflation, and there was some disappointment in the markets as CPI and Core CPI narrowly missed their estimates. This has pushed gold prices higher in the North American session. Gold has climbed above the symbolic $1300 level for the first time since September 26, taking advantage of the negative market sentiment. With inflation an important consideration in future rate decisions by the Federal Reserve, investors will be anxiously monitoring how Fed policymakers respond to September’s soft inflation numbers.

The markets remain very optimistic that a December rate hike is on the way, and this sentiment hasn’t changed after the release of the Federal Reserve minutes earlier this week. The minutes indicated that many policymakers felt that a December hike “was likely to be warranted”. However, some policymakers remain concerned about low inflation levels and said that inflation would be a consideration in their decision on a rate hike. The odds of a December hike have increased dramatically in the past few weeks, mostly in response to Fed Chair Yellen and other FOMC members expressing optimism that inflation will move upwards. On Wednesday, Kansas City Fed President Esther George went event further, saying that low inflation did not pose a problem, as the US economy was strong and the labor market was at full capacity. Currently, fed futures have priced in a December hike at 87 percent.


XAU/USD Fundamentals

Friday (October 13)

*All release times are GMT

*Key events are in bold


XAU/USD for Friday, October 13, 2017

XAU/USD October 13 at 8:45 EST

Open: 1293.54 High: 1302.55 Low: 1291.08 Close: 1300.97


XAU/USD Technical

S3 S2 S1 R1 R2 R3
1240 1260 1285 1307 1337 1367

Further levels in both directions:

OANDA’s Open Positions Ratio

XAU/USD ratio has shown little movement this week. Currently, long positions have a majority (68%), indicative of trader bias towards XAU/USD continuing to move to higher ground.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Kenny Fisher

Kenny Fisher [4]

Market Analyst at OANDA [5]
A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in several major online financial publications including Investing.com, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.
Kenny Fisher

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