Gold prices broke out as the dollar weakened following soft CPI report that paved the way for higher gold prices. Prices are poised to test target resistance near the September highs at 1,358. Support is seen near the 10-day moving average at 1,318. Momentum is positive as the MACD (moving average convergence divergence) histogram prints in the black with an upward sloping trajectory which points to higher prices.
CPI Was Mixed
U.S. CPI edged up 0.1% in December, with the core up 0.3%. Prior data are not revised, leaving the November headline rising 0.4% and the ex-food and energy component up 0.1%. The 12-month rate slowed to 2.1% year over year versus 2.2% year over year, but the core accelerated a bit to 1.8% year over year versus 1.7% year over year. Energy prices declined 1.2% versus the 3.9% bounce. Transportation costs dipped 0.2% from 1.9%.
This article was originally posted on FX Empire
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