Gold $40 Higher Despite US Inflation Ticking up in November

XAU/USD has climbed $40 from this morning’s low, as geopolitical tensions and nixed US inflation signals keep Gold buyers in control, as they target the all-time high once again.

The November CPI inflation report aligned with expectations, showing a steady trend in key metrics, however, the shelter index rose by 0.3% for the month, contributing over 40% of the total monthly increase in inflation across all goods. The Federal Reserve attributes much of this rise to lagged seasonal adjustments.

Rents climbed by 4.4% year-over-year, while owners’ equivalent rent increased by 4.9%. Despite this, the pace of increases appears to be slowing, with October CPI figures showing a decline of 0.1% and a modest rise of 0.1% in November. However, auto insurance costs remain a significant burden on US consumers, surging 12.7% year-over-year, marking it as one of the largest contributors to financial strain despite broader moderation in inflation trends. Fed pricing for a cut next week was at 85% ahead of the data.

Gold Chart H1 – The 20 SMA Acting As Support

Gold has been making decent gains this week, climbing almost $100 from the bottom to the top, and the US CPI inflation at gave it another push higher. After three daily bullish candlestick, Gold has climbed above $2,700 again and is now testing the $2,721 level which is the high from November 25.

Gold has surged to its highest level since November 21, reaching $2,718.50, a $40 gain for the day. This marks the third consecutive day of increases, driven by news that the People’s Bank of China (PBOC) has resumed gold reserve purchases after a six-month pause. Since the announcement of the PBOC’s renewed buying, gold prices have climbed by $100. The US CPI report helped ease fears that the Federal Reserve might halt its rate cuts, providing additional support to gold’s rally. However, the report’s impact has weighed on the US dollar, further bolstering gold’s appeal as a safe-haven asset.

US CPI Inflation Report for November

• Headline CPI:

  • US November CPI: +2.7% year-over-year (in line with expectations).
  • Previous reading: +2.7% year-over-year.
  • Month-over-month: +0.3% (as expected).
  • Unrounded m/m: +0.3130% vs. +0.2441% prior.

• Core Inflation Measures:

  • Core CPI: +3.3% year-over-year (matches expectations).
  • Core CPI m/m: +0.3% (in line with forecasts).
  • Unrounded Core CPI m/m: +0.308% vs. +0.2800% prior.
  • Real weekly earnings: +0.3% vs. +0.1% previously.
  • Core services excluding shelter: +0.3% (matches expectations).
  • Core CPI services excluding rent/Owner Equivalent Rent (OER): +4.2% vs. +4.4% prior.

Gold Live Chart

GOLD

Skerdian Meta

Lead Analyst

Skerdian Meta Lead Analyst.
Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank’s local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.