Long Gold (Opportunistic) - CPI New Trading
Story of Gold in 2023:
CPI release – Will it be an opportunity?
Inflation data has shown the stickiness nature even though it has come down a lot recently. Specifically, CPI reading came down to 4.9% yoy while core CPI ticked up to 5.5% yoy.
The acceleration in the Core is due to increase in shelters (+8.1% yoy), used car sales (+4.4% mom), energy (+0.6% mom), gasoline price (+3.0% mom).
The opportunity for trade:
Exposure Detail Exp. Pre.
USD Core CPI (MoM) (May) 0.4% 0.4%
USD Core CPI (YoY) (May) 5.3% 5.5%
USD CPI (YoY) (May) 4.1% 4.9%
USD CPI (MoM) (May) 0.2% 0.4%
Last reading of CPI gave mixed picture of inflation data whereby the CPI headline came below the Core CPI (yoy reading). It gave a choppy session and hard to find good entry.
What to consider before entry:
It’s highly recommended that both Core CPI and Headline CPI come down below expectations will give a clear shot for Long position in Gold as it reinforce the market expectation of a rate pause instead of a rate hike skip from chair Powel.
Any mixed signal of inflation data will make the price hard to find direction, especially before FOMC decision on interest rate.
Key Levels:
Key support levels: 1930-1940
Key resistance levels: 2000
- Gold has stayed elevated for a while. After Credit Suisse failing fund raising and bankrun in US, Gold has made the way to above $2,000 after geopolitical risk between EU and Russia.
- Gold made the way to above $2,000 once again when JPM bought First Republic Banks and expectation of FED & ECB will end their hiking cycle.
CPI release – Will it be an opportunity?
Inflation data has shown the stickiness nature even though it has come down a lot recently. Specifically, CPI reading came down to 4.9% yoy while core CPI ticked up to 5.5% yoy.
The acceleration in the Core is due to increase in shelters (+8.1% yoy), used car sales (+4.4% mom), energy (+0.6% mom), gasoline price (+3.0% mom).
The opportunity for trade:
Exposure Detail Exp. Pre.
USD Core CPI (MoM) (May) 0.4% 0.4%
USD Core CPI (YoY) (May) 5.3% 5.5%
USD CPI (YoY) (May) 4.1% 4.9%
USD CPI (MoM) (May) 0.2% 0.4%
Last reading of CPI gave mixed picture of inflation data whereby the CPI headline came below the Core CPI (yoy reading). It gave a choppy session and hard to find good entry.
What to consider before entry:
It’s highly recommended that both Core CPI and Headline CPI come down below expectations will give a clear shot for Long position in Gold as it reinforce the market expectation of a rate pause instead of a rate hike skip from chair Powel.
Any mixed signal of inflation data will make the price hard to find direction, especially before FOMC decision on interest rate.
Key Levels:
Key support levels: 1930-1940
Key resistance levels: 2000
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