Gold Prices Temporarily Supported by 100-Day Moving Average After Plummeting
Gold prices remained relatively stable near a two-month low during the Asian market session on Thursday, hovering just above the 100-day moving average at the $1990 mark. This stability comes after a sharp drop earlier this week, which saw the price of gold hitting its lowest point since December 13.
The recent drop in gold prices has been attributed to higher-than-expected inflation data in January, which has dampened expectations for an early and sharp interest rate cut by the Federal Reserve. This has left Fed officials with mixed views on the outlook for the economy.
If the price of gold falls below the 100-day moving average, the 200-day moving average at the $1965 mark will become a more important test for the precious metal.
Prior to this, US inflation data released on Tuesday showed an unexpected rise, with the Consumer Price Index (CPI) increasing at an annual rate of 3.1%, higher than the expected 2.9% rise. This led to a 1.4% decline in gold prices, the largest single-day drop since December 4.
Traders are now expecting around 97 basis points of rate cuts this year, with the first rate cut likely to come in June. The focus now shifts to the US retail sales data to be released later tonight, as well as the producer price index (PPI) data scheduled for release on Friday.
At 12:14 Beijing time, international spot gold was trading at $1,991.54 per ounce. The stability of gold prices in the face of economic uncertainties and the Federal Reserve’s stance will continue to be closely monitored by traders and investors.