The yellow metal gained during the first trading session of the week in London, but a strengthening dollar and data that confirmed persistent inflation sparked expectations of a policy tightening sooner than expected by the Federal Reserve.
Despite climbing 0.13% from Friday’s low to $1,786 an ounce, gold futures remain below the $1,800 level. Gold prices slid on Monday after hitting their highest level since October 13. The dollar, which usually moves inversely to gold, climbed a bit.
After the recent decline, gold shows some bullish bias to test the minor resistance line located at 1785 an ounce, by means of stochastic positivity, while the Exponential Moving Average of 50 implies further losses. This plays into the chances that the precious metal will experience new downtrends in the coming sessions.
Inflation pressures in the United States are currently temporary, according to new data released on Friday. Consumer prices continued to rise with levels not seen in 30 years. In September, it increased by 0.3% month-over-month while being 4.4 year-over-year.
U.S. Treasury Secretary, Janet Yellen, however, said on Friday that she remains of the opinion that inflation is a temporary consequence of supply chain bottlenecks, which will normalize by 2022.
In addition to the Fed’s policy announcement on Wednesday, the Reserve Bank of Australia and Bank of England will announce theirs on Tuesday and Thursday, respectively.
Caixin’s manufacturing purchasing managers index (PMI) for October was 50.6 in the Asia Pacific. Yesterday, the manufacturing PMI was 49.2 and the non-manufacturing PMI was 52.4.
The previous week, physical gold prices soared in India as demand was boosted by upcoming festivals. Chinese premiums, however, fell.