Gold prices are treading water near the $1,870 mark as investors await the release of the US Consumer Price Index (CPI) data on Thursday. The yellow metal has struggled to gain momentum, with the Federal Reserve’s latest meeting minutes failing to provide a significant market catalyst.
On Wednesday, gold spot prices opened around $1,859 and reached a high of approximately $1,877 during intraday trading. However, the precious metal is facing resistance in its attempt to breach the $1,880 level.
The FOMC minutes revealed that members of the Federal Reserve generally agreed that interest rates should remain on the restrictive side for an extended period. Despite this news, the impact on the gold market was limited, as Federal Reserve officials maintained a balanced stance on comments related to inflation risks and policy measures.
Investor attention is now focused on Thursday’s release of the US CPI data, which is expected to show a slight decrease from 3.7% to 3.6% for the headline annualized period through September. An unexpected increase in inflation could reignite concerns in the market and push the US Dollar higher, but for now, the Greenback’s impact remains limited.
Gold has experienced a minor uptick, with the price edging closer to the 50% retracement level of the last significant price swing on the daily charts. The 50-day Simple Moving Average (SMA) at the $1,900 level now presents a challenge for gold bulls. However, gold prices remain below the 200-day SMA, which is currently near $1,925.
Gold’s prospects hinge on its ability to maintain a balanced trajectory and continue climbing, as long as inflation concerns in the United States remain subdued. While gold is currently trading above $1,870, it is notably below its average bids for the year, reflecting the challenges it faces as it seeks to recover from the lows it reached earlier in 2023. Investors will be closely watching the US CPI data to gauge the metal’s next move.