Home » Spot gold regains the psychological mark of US$2,000, the market focuses on US PPI for Fed hints provider FX678

Spot gold regains the psychological mark of US$2,000, the market focuses on US PPI for Fed hints provider FX678

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Spot gold regains the psychological mark of US$2,000, the market focuses on US PPI for Fed hints provider FX678

Spot gold regained the psychological mark of US$2,000 on Friday, driven by a weaker dollar and lower U.S. Treasury yields. The price fluctuated around the $2,000 mark, ultimately trading at $2,003.46 per ounce, representing a 0.04% decrease.

The surge in gold prices was attributed to weak U.S. macroeconomic data, specifically the unexpected contraction of 0.8% in retail sales for January, signaling weakening household consumption. This has led to speculation on whether the Federal Reserve will accelerate policy easing in response to the economic fragility. However, with inflation well above the 2.0% target and showing stickiness, policymakers may not take preemptive action.

To gauge potential moves from the Federal Reserve, market participants are eagerly awaiting the upcoming Producer Price Index (PPI) survey, with expectations that it will show a decline to 0.6% year-on-year in January from the previous 1.0%. A weaker than expected PPI could be positive for gold prices, while an unexpected rise could lead to a negative effect. The recent Consumer Price Index (CPI) report showing stalled progress in slowing inflation adds to the uncertain outlook.

Analysts also provided technical analysis for gold prices, noting that if the bulls break the technical resistance at $2,005, a rebound towards the 50-day simple moving average at $2,030 could be seen. Conversely, if the sellers regain control, gold prices may trade around $1,990, with potential further losses leading to focus on the 200-day moving average near $1,965.

Overall, the market’s focus remains on how the Fed will respond to the economic challenges, with gold prices reacting to the various signals and data releases.

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