Spot gold surged in response to tame U.S. producer prices
The precious yellow metal continues its upward trajectory, setting another record as traders receive an extra boost from soft U.S. Producer Price Index (PPI) data, which showed a slight increase of 0.2%, below the expected 0.3%.
However, whether this offsets March's hot Consumer Price Index (CPI) report remains uncertain.
Following the inflation data, fewer forecasts suggest multiple rate cuts by the Federal Reserve this year, in contrast to earlier predictions of six or more cuts through 2024.
The market is adjusting its expectations for a Fed rate cut, possibly shifting the meeting from June to July or September.
In other news, a separate report revealed that fewer U.S. workers applied for unemployment benefits last week, with unemployment claims decreasing to 211,000 from 222,000 the previous week on a seasonally adjusted basis.
From a technical standpoint, the Relative Strength Index (RSI) 3-day 'lookback' indicator shows positivity, but a ‘bearish divergence’ is evident, while the Moving Average Convergence Divergence (MACD) remains positive.
Additionally, the ADX (trend) indicator signals a ranging market.
With increasing volatility, traders should reassess critical levels and adjust strategies accordingly.
A neutral bias persists as no clear upside view is evident as we explore uncharted waters.
However, with bearish divergence apparent, a significant downward movement may be on the horizon.
Daily Chart Spot Gold
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