The international gold price looks at 1913 US dollars in the market outlook
On Friday (January 13), the international gold price remained stable, hovering around $1,900 per ounce. U.S. inflation data for December released overnight led to a sharp weakening of the dollar, further supporting expectations of a slowdown in Fed rate hikes. The gold price looks at US$1913 in the market outlook.
At 14:49 Beijing time, spot gold rose 0.02% to $1,896.21 an ounce; the main COMEX gold futures contract rose 0.03% to $1,899.3 an ounce; the U.S. dollar index fell 0.02% to 102.226.
The data released overnight showed that the U.S. consumer price index fell sharply in December on an annual basis as scheduled, and the monthly rate shrank for the first time in more than two and a half years, providing new hope for the current downward trend in inflation.
“Typically, when inflation rises, gold prices go up,” said Edward Meir, metals analyst at Marex. “But we’ve seen gold prices continue to rise despite cooling inflation as the dollar moves lower on expectations of smaller rate hikes. Gold is facing some resistance around $1,900, so it may not continue to push higher and there may be some selling at these levels.”
The Fed slowed rate hikes to 50 basis points in December after raising rates four times in a row to 75 basis points last year, and is on track to ease further to 25 basis points in February. Gold is considered an inflation hedge, but higher interest rates increase the opportunity cost of holding the asset.
Philadelphia Fed President Harker said on Thursday (January 12) that while the central bank needs to raise interest rates more to cool inflation, it may do so at a slower pace. Atlanta Fed President Bostic said the inflation data could see the central bank scale back rate hikes to 25 basis points at its upcoming meeting.
On the daily chart, the price of gold is still in an upward ((3)) wave trend starting from US$1796, and the upper resistance is looking at the 138.2% target at US$1913. The ((3)) wave is the sub-wave of the upward wave III that started at $1725, and the wave III is the sub-wave of the upward wave (i) that started at $1616.
