On Tuesday (December 12th), spot gold slightly declined, but ultimately remained stable at $1978.68.
According to data released by the United States on Tuesday, the unadjusted annual CPI rate for November reached 3.1%, a new low since June this year, in line with market expectations. The core CPI, excluding food and energy costs, increased by 0.3% after a 0.2% increase in October, maintaining an annual rate of 4%. The data highlights the instability of inflation recovery. Although price pressures have largely fallen from decades of high levels, the still strong labor market continues to provide impetus for consumer spending and the broader economy. In a report, Olu Sonola, the head of the US economy at Fitch Ratings, stated that today's US inflation data "provides some ammunition for the Federal Reserve to reiterate that it is still too early to cut interest rates as early as March 2024.". The acceleration of inflation in core services reminds people that although the inflation trend is undoubtedly still encouraging, the sustained downward path that the Federal Reserve hopes to see is still far away. Analysis shows that the CPI data is slightly higher than expected, with both the overall and core monthly rates increasing by 0.1% compared to the previous month, highlighting the bumpy road for CPI to return to its target and reinforcing the statement already heard from different officials that reaching the last mile of the 2% target will be the most difficult. These data, especially combined with last week's employment report, have laid the foundation for this week's Federal Reserve interest rate meeting, with further rate hikes still under discussion if necessary. For Powell, the 4% core CPI is still too high, so it is unclear whether Tuesday's data will keep the Federal Reserve hawkish. FOMC may be keen to counter the growing market expectations for recent policy relaxation at Wednesday's meeting. Overall, the latest employment and inflation data may indicate that the first rate cut will be in the second quarter rather than the first quarter. As long as there is a tendency to maintain current high interest rates for a longer period of time at this week's Federal Reserve meeting, it will not be good news for gold.
Technically speaking, the bullish momentum of gold has recently declined, indicating that the market top has formed recently. In the overnight precious metal market, the gold daily chart recorded a longer and slightly bearish shadow. Currently, the gold price is gradually falling below the middle track of the Bollinger Bands channel, intensifying the downward cross arrangement of short-term indicators on the daily moving average, and the weak trend pattern remains unchanged. However, the technical indicator RSI on the short-term four hour chart shows that the short-term gold price has a temporary bottom deviation from the surface, and if the short-term gold price continues to decline, it may encounter strong correction demand. The initial resistance above is still at the 2000 integer level, which is then 2009. 1950 below may become a more solid technical support position.
