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Gold edges higher, investors eye consumer inflation

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Gold has posted gains in the Tuesday session. In North American trade, the spot price for one ounce of gold is $1310.21, up 0.16% on the day. There are no major indicators on the calendar. JOLTS Job Opening sparkled with a gain of 7.34 million, well above the forecast of 6.84 million. On Wednesday, the focus will be on consumer inflation, with the release of U.S. CPI reports.

The Federal Reserve hit the rate trigger four times in 2018, as the Fed responded aggressively to a red-hot U.S. economy. However, the global trade war and slower U.S. growth has resulted in the Fed lowering its forecast to two hikes in 2019. This could be overly optimistic, as the rate futures market has forecast no rate hikes until 2020. On Monday, Fed President Michelle Bowman said that she was satisfied with current monetary policy, and that the labor market and inflation levels had put the economy in a “good place”.

With the U.S. poised to impose further tariffs on China in early March, traders should be prepared for some movement from gold in February as investors keep a worried eye on developments. Risk appetite slipped last week after President Trump that he would not hold a meeting with President Xi prior to the tariff deadline, and this boosted gold prices. A third round of negotiations starts this week, with Treasury Secretary Mnuchin joining the talks later in the week. Investors are frustrated that there are no signs of progress, leading to concerns that the sides will not be able to reach a deal by March 2.

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XAU/USD Fundamentals

  • Tuesday (February 12)
  • 10:00 US JOLTS Job Openings. Estimate 6.84M. Actual 7.34M
  • 12:45 Fed Chair Powell Speaks
  • 19:30 US FOMC Member George Speaks

Wednesday (February 13)

  • 8:30 US CPI. Estimate 0.1%
  • 8:30 US Core CPI. Estimate 0.2%

*All release times are EST

*Key events are in bold

XAU/USD for Tuesday, February 12, 2019

XAU/USD February 12 at 11:55 EST

Open: 1308.11 High: 1314.80 Low: 1306.60 Close: 1310.21

XAU/USD Technical

S3 S2 S1 R1 R2 R3
1261 1284 1306 1326 1344 1365

XAU/USD was flat in the Asian session. The pair posted gains in European trade but has given up most of these gains in North American trade

  • 1306 is providing support
  • 1326 is the next resistance line
  • Current range: 1306 to 1326

Further levels in both directions:

  • Below: 1306, 1284, 1261 and 1236
  • Above: 1326, 1344 and 1365

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