A projected rise in US PPI and retail sales might propel XAU/USD towards the $1900 mark

Gold Prices Under Pressure as US Inflation Rises

 

Introduction

 

Gold prices are facing challenges as the latest US Consumer Price Index (CPI) report shows higher inflation rates. This has led to the Federal Reserve maintaining a tight monetary policy. The primary contributor to the increased inflation is energy, particularly crude oil prices. As a result, the idea of inflation staying high for a longer period of time is gaining popularity. While there may not be any immediate interest rate hikes, the possibility of rate cuts being delayed is being considered. However, the Fed’s decisions will ultimately depend on the data they receive.

 

What to Expect Today

 

Today, gold traders will be keeping an eye on the US Producer Price Index (PPI), jobless claims, and retail sales. These economic indicators will provide guidance for gold prices. If jobless claims continue to decrease and the PPI rises, it could lead to further decline in gold prices. It’s important to note that the PPI is a leading indicator for the CPI, as higher costs for producers often get passed on to consumers.

 

Current Gold Price Action

 

Currently, the daily XAU/USD price is trading below both the 50-day and 200-day moving averages. This downward momentum is supported by the Relative Strength Index (RSI). As a result, there is a possibility of gold prices reaching the psychological support level of 1900.00. If US data remains strong and the PPI numbers stay high, there may be a retest of this support zone.