Gold edges higher as U.S consumer inflation slips

Gold has posted slight gains in the Wednesday session. In North American trade, the spot price for one ounce of gold is $1245.29, up 0.19% on the day. In economic news, consumer inflation reports softened in November, but matched the estimates. CPI dipped to 0.0 percent and Core CPI fell to 0.2 percent. On Thursday, the U.S releases unemployment claims.

The markets have become used to the Federal Reserve’s “gradual rate hike” policy, but that is likely to change next year. Only a few months ago, there was talk that the Federal Reserve could hike rates up to four times in 2019. However, signs of a slowdown in the U.S. economy have drastically changed matters, as the Fed is expected to scale back its rate increases, with many analysts predicting just one rate hike next year. Three rate hikes so far this year are starting to cool the red-hot U.S. economy. This trend is apparent from lower GDP readings and a dismal nonfarm payrolls report for November. Still, the Fed is widely expected to raise rates at the policy meeting on December 19, with the CME pegging the likelihood of a rate hike at 80%. The steady diet of rate hikes has also helped support the U.S dollar against other major currencies and gold. Since the start of the year, gold prices have fallen 4.5 percent, even with the global trade war and other geopolitical hotspots which

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XAU/USD Fundamentals

Wednesday (December 12)

  • 8:30 US CPI. Estimate 0.0%. Actual 0.0%
  • 8:30 US Core CPI. Estimate 0.2%. Actual 0.2%
  • 10:30 US Crude Oil Inventories. Estimate -3.0M. Actual 1.2M
  • 13:01 US 10-year Bond Auction
  • 14:00 US Federal Budget Balance. Estimate -193.5B

Thursday (December 13)

  • 8:30 US Unemployment Claims. Estimate 226K

*All release times are EST

*Key events are in bold

XAU/USD for Wednesday, December 12, 2018

XAU/USD December 12 at 12:05 EST

Open: 1243.06 High: 1246.83 Low: 1242.09 Close: 1245.29

XAU/USD Technical

S3 S2 S1 R1 R2 R3
1204 1220 1236 1261 1284 1306

XAU/USD posted small gains in the Asian session. In the European session, the pair edged lower but then recovered.  XAU/USD is showing little movement in North American trade

  • 1236 is providing support
  • 1261 is the next resistance line
  • Current range: 1236 to 1261

Further levels in both directions:

  • Below: 1236, 1220, 1204 and 1170
  • Above: 1261, 1284 and 1306

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

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