US inflation figures rose, gold retreated towards $1780s
Gold is rallying during the New York session, up some 0.27%, trading at $1,780 at the time of writing. Inflation in the US climbed to its fastest annual rate since 1982. On Friday, the US Bureau of Labor Statistics (BLS) reported that the Consumer Price Index for November annually based rose by 6.8%, in line with estimations, though higher than October’s 6.2%. Excluding volatile items like food and energy, the so-called Core Consumer Price Index for the same period came at 4.9%, as widely expected, trailed by October’s figure, which increased up to 4.6%.
- US inflation figures rose the most since the early 1980s, and gold spiked towards the 100-DMA around $1,790.
- On an annual basis, CPI for November rose 6.8%, while Core CPI came at 4.9%.
- XAU/USD Price Forecast: Strong support around $1,779 would keep gold prices within the $1,780-90 range.
The report further cemented the intentions of the Federal Reserve to increase the pace of the bond taper, as mentioned by US central bank’s policymakers in the last week. Led by Fed’s Chair Jerome Powell, he noted that favors a faster QE’s reduction and emphasized that he would “speak about it” at the next meeting, in the next week, on December 15-16.
In the overnight session ahead of the US Consumer Price Index, gold seesawed around $1,778, the central daily pivot point, followed by an $8 slide towards the December 9 daily low around $1,770. Once the inflation headline crossed the wires, gold printed a $19 spike up to $1,790, near the 100-day moving average (DMA), to retreat down to familiar levels around high $1,770s.
Short-Term Outlook
Gold is trading around the simple moving averages (SMA’s), which are in a narrow $2 range within the $1,779-82 area. Furthermore, the central daily pivot around $1,778.50 lies below that range, meaning it would be solid support for USD bulls to overcome.
The first resistance on the way up would be the December 9 high at $1,787. A breach of the latter would expose the confluence $1,792. On the flip side, $1,778.50 would be the first support. If USD bulls push the price further down, that will expose at $1,773, followed at $1,769.
