Gold prices changed little as the dollar strengthened against its peers following an ex[pectation-beating inflation report reiterated expectations that the Federal Reserve would increase interest rates two additional times for the year.

On Wednesday, the Labor Department has revealed that its producer price index for final demand increased 0.3% last month compared to popular expectations of 0.2%. A stronger dollar and higher interest rates reduce demand for non-interest bearing gold as the metal becomes more expensive for holders of other currencies.

In the meantime trade concerns remained n the spotlight as the latest update brought the Chinese equity markets into their worst selloff since three years ago.

Gold prices remained weak following the release of mixed consumer inflation data last month. The US Labor Department has revealed that its US Consumer Price Index increased 0.1% for the month of June, following last month increase of 0.2%, which was slightly weaker than expected. Similar, monthly core inflation, which takes out volatile food and energy costs increased 0.2%, while annual core inflation increased to its highest level in 6 years to 2.3%.

The commodity has been significantly pressured for the past couple of day as global trade tensions continue to shake all financial markets. US initial weekly jobless claims decreased by 18 K to a seasonally adjusted 214 K in the week to Saturday, which was below popular expectations.

Gold prices are trading modestly higher during early US trade session, with short covering in the futures market to be featured, following the recent selling pressure. The feature in the marketplace late this week is U.S. President Trump in Europe meeting with European leaders, with a meeting with Russian President Vladimir Putin scheduled for next Monday. The marketplace will watch Trump’s meetings closely. The just-concluded NATO meeting was declared a success by Trump.

Gold 1H Chart
Gold 1H Chart

Bullish Outcome: Above 1243.80 Bollinger band, look for further upside with 1246.35 and 1252.30 in extension.

Bearish Outcome: Below 1243.80 middle Bollinger band, look for further downside with 1241.26 and 1236.50 in extension.