On Wednesday (November 9), the international gold price fell from the high of $1,716.79 per ounce since October 6, which was set in the previous trading day, but the intraday price fluctuation range was relatively narrow. Cautious investors wait for the U.S. inflation data to be released on Thursday (November 10), which may support the Fed to slow down the pace of interest rate hikes, and the gold price will see $1,729 in the market outlook.
At 14:53 Beijing time, spot gold fell 0.13% to US$1,709.80 per ounce; the main COMEX gold futures contract fell 0.17% to US$1,713.0 per ounce; the US dollar index rose 0.11% to 109.753.
Stephen Innes, managing partner of SPI Asset Management, said: “After the sharp rebound in gold prices, some bulls chose to take profits. If the US CPI data is higher than expected, the price of gold may fall below $1,690, otherwise it may break the level of $1,725.”
Investors will still focus on the upcoming US consumer price index report on Thursday (November 10). The performance of the data may influence the Fed’s stance on raising interest rates in the future. Economists expect the U.S. core consumer price index to slow to 0.5 percent and 6.5 percent on a monthly basis in December, respectively.
Traders now see the Fed raising rates by at least 50 basis points at its December meeting, but less than a 45% chance of a fifth straight 75 basis point hike. Gold is seen as an inflation hedge, but higher interest rates could undermine the attractiveness of the non-yielding asset.
Open interest in overnight COMEX gold futures rose for the second day in a row by nearly 11,000 contracts, latest data from CME Group showed. The trading volume resumed the upward trend, increasing by nearly 126,000 lots, and recorded the largest single-day increase since July 12. When the price rose on the same day, both open interest and trading volume increased, opening the door to continue to rise in the short term.
On the hourly chart, the price of gold has started an upward iii wave from $1,664, with the upper resistance looking at the 85.4% target at $1,720 and the 100% target at $1,729. Wave iii is a sub-wave of the up (i) wave that started at $1616.