Gold trading outlook: futures trade little changed ahead of US CPI report

Written by Miroslav Marinov

Miroslav Marinov, a financial news editor at TradingPedia, is engaged with observing and reporting on the tendencies in the Foreign Exchange Market, as currently his focus is set on the major currencies of eight developed nations worldwide.

, | Updated: October 30, 2024

On Wednesday gold for delivery in June traded within the range of $1,241.50-$1,258.60. Futures closed at $1,242.90, plummeting 1.08% on a daily basis. It has been the 25th drop in the past 51 trading days, a second consecutive one and also the steepest one since March 23rd, when the commodity went down 1.96%. The daily low has been an exact test of the low from April 11th. The precious metal has gained 0.84% so far during the current month, following three consecutive months of advance.

On the Comex division of the New York Mercantile Exchange, gold futures for delivery in June were edging up 0.07% on Thursday to trade at $1,243.80 per troy ounce. The precious metal went up as high as $1,245.80 during the early phase of the European trading session, while the current daily low was at $1,230.80 per troy ounce, recorded during early Asian trade.

The yellow metal retreated from recent almost 1-month highs on April 12th on overbought conditions, signaled by the 4-hourly 14-period Relative Strength Index. This coincided with optimistic trade data out of China, which urged market players to cut short their possessions of safe haven assets, such as gold. Total exports of the worlds second largest economy were reported to have surged 11.5% in March, outstripping the median forecast by analysts, and rebounding after a 25.4% drop in February. At the same time, the nations imports shrank less than projected, by 7.6% during March, slowing down from a 13.8% slump in February, which resulted in a trade surplus of CNY 194.6 billion (USD 29.86 billion) during the period. In February Chinas trade balance produced a surplus of CNY 209.5 billion (USD 32.59 billion), which was a revision down from a CNY 210.0 billion surplus reported previously.

Meanwhile, in an interview with CNBC on April 12th, the Fed President for Dallas, Rob Kaplan, noted that the timing of the next rate hike should depend on incoming macroeconomic data, while such a move should be considered at the Federal Reserve’s policy meeting in June, in case further improvement in economic outlook is observed.

At 14:00 GMT today the Fed President for Atlanta, Dennis Lockhart, and Fed Board of Governors’ member, Jerome Powell, are expected to take a statement. These events will be closely watched by market players for hints over how the central bank’s tightening cycle will develop in the future. The FOMC is to meet next on April 26th-27th.

On Thursday the precious metal may be strongly influenced also by the key monthly report on US consumer prices. The annualized consumer inflation in the country probably accelerated to 1.2% in March, according to market expectations, from 1.0% in February. In monthly terms, the Consumer Price Index (CPI) probably rose 0.2% in March, following a 0.2% drop in the preceding month. Additionally, the annualized core consumer inflation, which is stripped of prices of food and energy, probably remained at 2.3% for a second consecutive month in March, according to expectations. It has been the highest core inflation since May 2012. If the general CPI tends to approach the inflation objective, set by the Federal Reserve Bank and considered as providing price stability, or a level below but close to 2%, this will usually bolster the appeal of the US dollar and have a strong bearish effect on gold, as it heightens the probability of monetary policy tightening. The Bureau of Labor Statistics is to release the official CPI report at 12:30 GMT.

Meanwhile, silver futures for delivery in May were edging down 0.15% on the day to trade at $16.195 per troy ounce, after going down as low as $15.925 a troy ounce during the late phase of the Asian trading session.