Gold Price Consolidates Ahead of Core CPI Data As Tapering Looms
Gold price continues to trade in a sideways trend, ahead of Wednesday’s crunch CPI data. The market prediction is for a slight increase in core consumer inflation from 0.1% to 0.2%, while the headline figure remains static at 0.3%.
Rising inflation has been the deciding factor that has set up the potential commencement of tapering in November. The markets are still pricing in this date despite a softer-than-expected jobs number for September.
Fed policymaker and Atlanta Federal Reserve President Raphael Bostic was quoted in a Financial Times interview saying that the US labour market had made sufficient progress to allow the Federal Reserve to taper its $120 billion a month QE program. He also reiterated that he would be comfortable with a November commencement date.
A stronger inflation number reinforces this sentiment and could lead to a stronger greenback.
Gold Price Outlook
The 4-hour XAU/USD chart shows that gold price is trading sideways, with 1768 serving as the ceiling and 1746 serving as the floor. A break above the range targets 1789 as the primary barrier, with 1800.00 and 1815 serving as additional targets to the north.
On the flip side, a decline below the range targets 1741, with 1719 and 1699 serving as additional downside targets. This may be the outcome if the CPI numbers trend upwards.