Gold prices took a technical support around$1,930 per ounce,driven by the cheer of softening US inflation,has been cut short but a mild rebound in the US Dollar overnight.Gold prices were confined to a restricted range nearing$1,960 per ounce after testing immediate resistance of$1,980 per ounce.As of 10:50 am Singapore Standard Time,Gold Comex December futures traded at$1,964.45 per ounce,hovering just above the previous close.
Another jump in bullion prices towards$2,000 per ounce is still well placed in Gold as the“Reverse Head and Shoulders”pattern in making is holding firmly on daily technical charts.However,a lot more clarity on the FED’s stance and global economic standing may be a prerequisite for Gold’s flight ahead.The recent hopeful Chinese industrial production and retail sales data may continue to limit the downside in Gold.Gold investors are likely to focus on any incoming indicators and support measures from China,the world’s largest consumer of Gold.
Gold’s appeal as an inflation hedge has been tested multiple times this year and Gold prices have been suffering the burden of elevated borrowing costs.Investors that have been abandoning the yellow metal for better returns in the bond markets,seem to have returned with boosted hopes of FED’s pivot soon.Although Gold bulls may be stepping ahead of themselves to soon.While the better-than-anticipated US Inflation sparked a rally in Gold,“higher for longer terminal rates”look likely.The US inflation is still well beyond the FED’s acceptable range and US Treasuries still reflect signs of resilience.Unless we have a dominant catalyst Gold prices may find the support of the downside at$1930 per ounce while eyeing$2000 per ounce psychological level.