Gold price surge to an unprecedented high of $2,550 per ounce, breaking through its previous resistance, after the release of US inflation data on Thursday. This spike comes in response to the Producer Price Index (PPI) inflation report, also known as “factory gate” price inflation, highlighting the continuing upward momentum of gold prices.
Gold’s New High After US Inflation Data
The price of gold experienced a significant surge as it hit a new all-time high of $2,550 per ounce. This rise followed the US PPI and jobless claims data released earlier in the day. The report indicated a broad weakening of the US Dollar, driving gold prices upward.
The core PPI, which excludes food and energy, showed a 2.4% increase in August, mirroring the figure from July. This was slightly below the forecast of 2.5%, as reported by the US Bureau of Labor Statistics (BLS). Despite the data missing expectations, it contributed to the weakening dollar, which in turn benefited gold price surge.
Impact of US Jobless Data on Gold Prices
Along with the US inflation impact on gold the US job market report also played a role in gold’s rise. Initial jobless claims for the week ending September 6th stood at 230K, which was higher than the revised figure of 228K from the previous week. Continuing jobless claims were reported at 1.850 million, slightly above the prior week’s revised-up figure of 1.845 million.
This uptick in jobless claims signals a cooling job market, which led to further dollar weakness and supported the upward momentum for gold price surge. Investors often turn to gold as a safe-haven asset during economic uncertainty, explaining its recent jump.
Technical Outlook: Gold’s Breakout Above $2,550
On a technical level, gold broke out of its sideways trading range that it had been in for weeks, reaching a fresh high for 2024 at $2,550. Analysts believe that since the broader trend is bullish, gold may continue to rise in the near future. The price target of $2,550 has now been met, based on the breakout pattern from the July-August range on August 14th.
Future Targets for Gold
With gold now trading above $2,550, the next upside target lies at $2,570, aligning with the 0.786 Fibonacci retracement of its previous channel. Should this level be breached, further gains could be anticipated.
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