Gold sparked over 1-week high, weak dollar  support likely 

Gold prices witnessed a meaningful surge yesterday. The prices sparked over to one week high as after the U.S. consumer price index readings for October showed inflation pressures easing more than predicted. Which anticipated speculation about a less aggressive Federal Reserve stance on interest rates.

The numbers released yesterday remained unchanged from the previous month and saw a minor annual increase of 3.2%, according to the Bureau of Labor Statistics.

This easier inflation data has lifted the drastic plunge in dollar and Treasury yields, and waned the probability of another forthcoming rate hike by the Federal Reserve.

Apart from this, prices are also influenced by comments from various officials and analysts. Federal Reserve Vice Chair Philip Jefferson emphasized the need for more forceful action due to high inflation uncertainty while speaking at a Zurich conference.

The news also brought comfort ahead of a meeting between US President Joe Biden and Chinese leader Xi Jinping, which is seen as a positive sign amidst global economic uncertainty.

Looking ahead, the U.S. is set to release producer price data with a forecast of 0.3% unchanged from previous 0.3%.  Core retail sales numbers for October, which are expected to dip into negative territory after a string of solid monthly gains at -0.2% from previous 0.6%. Retail sales expected to be negative by 0.3% from 0.7%. The above numbers will drive gold prices.

Technical Outlook

Since 12 November 2023, Gold prices turned positive. Prices recovered more than 1.20%, from the low of 59551 to today’s high 60405.00. Now traded at 60377, up 0.52%.

On the above chart, breached strong resistance 60350 coincided with 23.6% Fibonacci Retracement level. Adding to this, prices are making higher highs at the same time.  Both technical aspects indicate a bullish momentum in the near future.  Further, RSI also treads on a positive node.

Hence, a break above 60455 will lead upside momentum towards 60850-61150.00. Else, any dip towards 60100-60080 could attract near future buying activities.

On the downside, crucial support is seen at 59820-59420.00.