On Tuesday gold for delivery in December traded within the range of $1,154.90-$1,166.20. Futures closed at $1,165.80, adding 0.08% on a daily basis, while marking a third consecutive trading day of gains. In weekly terms, the yellow metal appreciated 1.69% last week, which has been the sharpest weekly advance since the week ended on September 20th, when it surged 3.14%.
On the Comex division of the New York Mercantile Exchange, gold futures for delivery in December were gaining 0.72% for the day to trade at $1,173.80 per troy ounce. The yellow metal overcame the upper range breakout level (R4) and the weekly R2 level, as it went up as high as $1,176.00 earlier today. It has been the highest level since June 30th, when a daily high of $1,176.40 was reached. The latter may serve as a potential level of resistance for the commodity. A break above it may drive the precious metal up for a test of the weekly R3 level at $1.189.53.
US producer prices, retail sales
Annual producer prices in the United States probably fell for an eighth month in a row in September, by 0.7%, according to the median estimate by experts. If so, it would be the lowest annual drop since June. In August the annualized Producer Price Index decreased 0.8%. At the same time, the nation’s annualized core producer price inflation, which excludes prices of volatile categories such as food and energy, probably accelerated to 1.2% in September from 0.9% in the prior month. If so, this would be the most considerable annual surge in the core PPI since January 2015, when the index rose 1.6%. The Bureau of Labor Statistics is expected to report on the official PPI performance at 12:30 GMT.
Retail sales in the United States probably rose 0.2% in September on a monthly basis, according to the median forecast by experts. In August sales were up another 0.2%, while the July performance was revised up to a 0.7% increase from a 0.6% gain previously. Annualized retail sales surged 2.2% in August, following a 2.6% climb in July. The latter has been the fastest rate of increase since January 2015, when a 3.7% increase was reported. Additionally, US core retail sales, or retail sales ex autos, probably went down 0.1% in September compared to a month ago. If so, this would be the first monthly drop since June. In August core sales increased 0.1%. A larger-than-expected rate of increase in sales would have a strong bullish effect on the US dollar and a strong bearish effect on gold, respectively. The official report is due out at 12:30 GMT.
Recently the precious metal has found support on the back of trimmed expectations that the Federal Reserve Bank will introduce a rate hike by the end of the year. The report on producer prices provides clues over the potential path of consumer prices in the country, while the latter, alongside retail sales index performance, are key indicators, on which monetary policy decisions are usually based.
Chinese consumer inflation slows in September
Earlier on Wednesday it became clear that annual consumer prices in China rose at a lesser rate than projected in September, at 1.6% instead of 1.8%, slowing down from a 2.0% annual growth posted in August.
At the same time, annual producer prices in the country slid for a 42nd consecutive month in September, going down 5.9%, while matching market expectations and the rate posted in August.
The PPI and CPI performance suggest that the Peoples Bank of China may need to further expand monetary stimulus in order to spur economic growth.
Daily and Weekly Pivot Levels
By employing the Camarilla calculation method, the daily pivot levels for gold are presented as follows:
R1 – $1,166.84
R2 – $1,167.87
R3 (range resistance) – $1,168.91
R4 (range breakout) – $1,172.02
S1 – $1,164.76
S2 – $1,163.73
S3 (range support) – $1,162.69
S4 (range breakout) – $1,159.59
By using the traditional method of calculation, the weekly pivot levels for gold are presented as follows:
Central Pivot Point – $1,148.67
R1 – $1,164.83
R2 – $1,173.37
R3 – $1,189.53
S1 – $1,140.13
S2 – $1,123.97
S3 – $1,115.43
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