Gold prices spike following hotter US CPI numbers

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Gold technical analysis, overview, strategies, and levels

Majority buy gold traders have been waiting a long time for this move, one that aided conformist breakout strategies more comfortably even if prices retraced back to its previous first resistance level as of writing.

In US data, consumer prices were all that seemed to matter, Consumer Price Index (CPI) figures month-on-month showing growth of 0.9% instead of 0.6% expectations, while year-on-year at 6.2%, highs unseen since 1990, its core which excludes food and energy at 4.6%; in other economic data unemployment claims dropping but above estimates at 267,000, wholesale inventories rising 1.4%, and the Treasury Budget deficit widening but less than expectations.

Pricing data has remained a crucial component when it comes to market expectations of a rate hike out of key central banks, and influencing the bond market as well, and as a result yesterday's CPI out of the US sent yields spiking across the board and the dollar an outperformer in the FX market, inflation expectations rising to fresh highs for the five-year, and a falling bid-cover ratio again, this time for the 30-year auction after the ten-year's auction the night before. US data for the remainder of the week includes less, though it'll be more about markets digesting the latest figures and rate expectations out of the US central bank.

From a technical standpoint, most of its key technical boxes are flashing green, its bull trend stalling in the sense of failing to offer moves beyond upper levels absent significant fundamental updates, from a weekly standpoint continuing to show signs of an eventual break.

IG client* and CoT** sentiment for Gold

In sentiment, retail buy bias has risen back into heavy long territory from what was 63% as of yesterday morning to 69%, while over on the larger speculator side (according to last Friday’s Commitment of Traders report) it has been a consistent heavier buy 76% just shy of extreme long territory.

Gold chart with retail and institutional sentiment

^{*The percentage of IG client accounts with positions in this market that are currently long or short. Calculated to the nearest 1%, as of today morning 8am for the outer circle. Inner circle is from the previous trading day.}

^{**CoT sentiment taken from the CFTC’s Commitment of Traders report, outer circle is latest report released on Friday with the positions as of last Tuesday, inner circle from the report prior.}