Gold prices advanced as the greenback was trading weak following Treasury yields eased from recent highs during the prior session. Reports that U.S. President Donald Trump felt the Federal Reserve is hiking rates too fast received some focus.

The commodity is benefitting from an increase in risk-aversion following the IMF downgrading its outlook for the U.S., China, the eurozone and the UK, saying it now expects the global economy to expand by just 3.7% in 2018 and 2019, down from 3.9% before.

Gold prices remained on the defensive and below critical technical level as wholesale inflation increase in line with expectations. The US Labor Department revealed that its Producer Pirce Index increased 0.2% in September following a drop of 0.1% in August, with the data lining with expectations.

Additionally, Core PPI which strips out volatile food and energy costs, rose 0.2% in the last month, following a 0.1% drop in August. The majority of economists were expecting to see an increase of 0.2%.

The US economic release is having a little impact on gold prices as the market continues to be dominated by the greenback. The commodity is not reacting to the recent inflation data as prices are still trading below the critical technical level at 1200 an ounce.

While inflation is seen to be increasing, experts are noting that the current levels are still fairly low, which could continue to be supportive to the US economic growth and has kept the Federal Reserve from aggressively increasing interest rates.

 

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Bullish Outcome: Above 1192.29 Bollinger band, look for further upside with 1194.93 and 1197.70 in extension.

Bearish Outcome: Below 1192.29 middle Bollinger band, look for further downside with 1189.65 and 1186.70 in extension.