Gold prices
Gold prices

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.

XAU/USD Chart (4-hour)

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