Despite the latest US September Producer Price Index (PPI), a leading indicator of inflation, exceeding both expectations and the previous reading, investor reaction was not as strong as the data suggested. There was no large-scale profit-taking in the gold market to hedge against the risk of a Fed rate hike. This is likely due to the simultaneously released September month-on-month overall retail sales and retail sales excluding automobiles falling short, and the October Philadelphia Fed Manufacturing Index also recording lower-than-expected figures. The economic data did not fully support the projections of consecutive rate hikes, leading investors to expect the Fed to raise interest rates only once more by 0.25% before the end of the year, completing its rate hike cycle in 2026. Therefore, gold prices rebounded yesterday after a limited pullback following the data release.

If US crude oil prices continue their volatile upward trend this week, persistently high oil prices will continue to fuel investor expectations of a faster-than-expected pace of Fed rate hikes, significantly impacting the lack of support for gold prices at high levels.

Gold prices may fluctuate between $4,131 and $4,222 in the short term. Pay close attention to the lower end of the range for potential buying opportunities. There is room for a rebound in the short term. $4,111 can be used as an important price defense reference level. Be sure to take appropriate risk precautions.

Risk Warning: This article is for market analysis purposes only. Price ranges and levels mentioned are for market observation and do not constitute investment advice. Precious metal prices are highly volatile; please make independent and prudent decisions and manage your own risk.

Gold price chart (1 hour):

Ferris Kwok

Chief Analyst
Success Finance Group

Email: ferris.kwok@successfn.com