Gold touched a three-month high
After disappointing employment and inflation data from the U.S., now it is a Chinese term. Earlier today, while the market was expecting another rise of 24.8% in Chinese Retail Sales, the market participant got disappointed with only a 17.7% increase, even though if the industrial production was in line with expectations and published at 9.8% year-on-year in April, investors still worry about the future growth in the largest factory of the world. Last week's U.S. Retail Sales in April also did not grow, despite the stimulus checks distributed earlier in the year.
So far today, Gold futures were up 0.77% to $1,852.50, testing three months high since February 10. On the other hand, the U.S. dollar, which usually negatively correlates with Gold, moves in the same direction as yellow metal and gaining 0.08% to 90.40. U.S. 10-year Treasury yield also falling from its one-month high of last week.
"Dallas Fed President Robert Kaplan on Friday warned of a worrisome rise in U.S. inflation expectations, as imbalances between supply and demand for labor and goods put upward pressure on prices. However, Cleveland Fed President Loretta Mester said that the Fed's policy is currently in a good place." (Reuters)
In the week ahead, we are waiting for FED meeting minutes. It must be necessary for investors and market participants to look after FOMC members' comments about the inflation path.
Also, we need to follow the FED speakers of the week to know the possible future moves of the Federal Reserve.
Finally, the market still doubts the fate of inflation and central banks' reactions. And as long as investors can not trust the officials and their reactions, Gold can take advantage of that and use the momentum to raise more.
Technically, RSI at 70, price move above chart and OBV trend line, tangent to the upper line of B.B., all signaling of more raise at the moment. Following targets for Gold sitting at $1,860 and $1,876 as second and third resistance. Gold's downtrend only starts under first support at $1,828.
