Forex News
- Silver extends six-day rally, bulls eye $90 breakout zone.
- RSI approaches overbought territory, signaling strengthening upside momentum.
- Break below $83.06 would neutralize the bullish structure near-term.
Silver (XAG/USD) price extends its gains for the sixth consecutive day on Wednesday, up over 1.30%, despite US inflation might prevent the Federal Reserve (Fed) from cutting interest rates. This suggests that rates would be higher-for-longer, yet the white metal closes into the $90.00 figure, trading at $87.67 a troy ounce at the time of writing.
XAG/USD Price Forecast: Technical outlook
From a technical standpoint, XAG/USD is neutral to upward-biased, with buyers attempting to challenge the $89.50 area for the first time since mid-March. Nevertheless, they fell short, as the white metal peaked at around $89.38 before recoiling beneath $88.00.
Momentum remains bullish, as indicated by the Relative Strength Index (RSI), which is closing into overbought territory, suggesting that bulls are gaining traction.
Should XAG/USD clear $89.50, it would open the door to challenging $90.00. On further strength, the next stop would be the March 2 high of $96.62, ahead of $100.00.
On the bearish side, Silver would shift neutral if it drops below the April 17 daily peak, which has since turned into support at $83.06. Below this area, the next area of interest would be the 100-day Simple Moving Average (SMA) at $81.11, followed by the 20-day SMA at $77.76, ahead of the 50-day SMA at $77.09. Beneath this area, the next stop would be the $70.00 figure.
XAG/USD Price Chart – Daily
Silver FAQs
Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
BNP Paribas economists note that Malaysia has kept stable the price of RON 95 fuel used mainly by households, limiting the fiscal impact of subsidies to about 0.2% of GDP if Oil stays below USD 100. Despite some foreign ownership of government debt, long maturities and deep domestic capital markets reduce vulnerability to global yield volatility.
Limited fiscal hit, strong local markets
"The impact on public finances of the increased subsidies introduced since the start of the conflict in the Middle East is expected to remain modest as long as the average crude oil price does not exceed USD 100 per barrel over the year. "
"The cost is estimated at between 0.2% of GDP in Malaysia and 0.6% of GDP in Indonesia, assuming that currencies stabilise at current levels, as any further depreciation against the dollar would automatically increase the cost incurred."
"The most exposed countries would be those with the highest interest burdens (India), with short maturities, debt held more widely by foreign residents (Indonesia and Malaysia) and denominated more widely in foreign currencies (Indonesia)."
"In Malaysia, although a significant proportion of government debt (65.3% of GDP) is also held by foreign investors (21.1% of the total), this debt has long maturities, which reduces its vulnerability to volatility in international financial markets."
"Furthermore, the domestic capital markets and the local investor base are sufficiently developed to finance the government’s needs."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Here is what you need to know for Thursday, May 14:
The US Dollar Index (DXY) rises toward the 98.50 region, reaching its highest level since late April after US Producer Price Index (PPI) data came in much hotter than expected. Headline PPI rose 1.4% MoM in April, above the 0.5% forecast, while Core PPI climbed 1.0%, reinforcing concerns that inflation pressure is surging and that the Federal Reserve (Fed) may keep rates elevated for longer.
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.24% | 0.13% | 0.17% | 0.06% | -0.22% | 0.28% | 0.18% | |
| EUR | -0.24% | -0.12% | -0.09% | -0.21% | -0.47% | 0.03% | -0.10% | |
| GBP | -0.13% | 0.12% | 0.04% | -0.07% | -0.34% | 0.18% | 0.03% | |
| JPY | -0.17% | 0.09% | -0.04% | -0.11% | -0.39% | 0.11% | 0.00% | |
| CAD | -0.06% | 0.21% | 0.07% | 0.11% | -0.28% | 0.23% | 0.11% | |
| AUD | 0.22% | 0.47% | 0.34% | 0.39% | 0.28% | 0.52% | 0.41% | |
| NZD | -0.28% | -0.03% | -0.18% | -0.11% | -0.23% | -0.52% | -0.12% | |
| CHF | -0.18% | 0.10% | -0.03% | -0.00% | -0.11% | -0.41% | 0.12% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
EUR/USD falls toward the 1.1710 area, pressured by broad USD strength and rising US yields. The Euro remains unable to build momentum as traders reassess Fed expectations and monitor softer signals from the Eurozone.
GBP/USD declines toward the 1.3520 region, weighed down by the stronger Greenback and renewed UK political and fiscal concerns. Sterling remains vulnerable as pressure on Prime Minister Keir Starmer, elevated Gilt volatility, and doubts over the UK’s economic outlook keep investors cautious.
USD/JPY advances near the 156.90 zone, supported by higher US yields after the hot inflation data. The Japanese Yen (JPY) remains under pressure as widening yield differentials continue to favor the US Dollar despite lingering safe-haven demand linked to geopolitical uncertainty.
AUD/USD retreats toward the 0.7250 region as the stronger USD offsets support from commodity prices and risk-sensitive flows.
West Texas Intermediate (WTI) Oil trades near the $101.20 per barrel, supported by falling US crude inventories and persistent supply concerns linked to the Iran conflict and disruption in the Strait of Hormuz. US crude stocks fell by 4.3 million barrels, more than expected.
Gold remains pressured near the $4,690 region as higher US yields and a stronger US Dollar reduce demand for the non-yielding metal. However, geopolitical uncertainty continues to limit deeper downside.
What’s next in the docket:
Thursday, May 14:
- AU May Consumer Inflation Expectations
- UK March GDP MoM; UK Q1 GDP QoQ Prel; UK Q1 GDP YoY Prel
- UK March Industrial Production MoM; UK March Manufacturing Production MoM
- DE April HICP YoY
- US Initial Jobless Claims
- US April Retail Sales MoM; US April Retail Sales Control Group; US April Retail Sales ex Autos MoM
- NZ April Business NZ PMI
Friday, May 15:
- FR April CPI EU norm YoY; FR April CPI YoY
- US May NY Empire State Manufacturing Index
- US April Industrial Production MoM
WTI Oil FAQs
WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.
Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.
The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.
Philip Lane, Member of the European Central Bank (ECB), told an audience in London on Wednesday that the propagation of the Iran shock may be more contained than in 2022, but stronger and faster than historical averages.
Key quotes:
Increase in selling price expectations suggests input cost pressures will map into higher output prices in coming months.
Firm-side and news-based indicators suggest current energy shock is unfolding in a less demand-supportive environment.
Propagation of Iran shock may be more contained than in 2022, but stronger and faster than historical averages.
A mid-size but not-too-persistent overshoot could warrant some measured adjustment.
In face of larger and more persistent overshoot, response must be appropriately forceful or persistent.
Demand destruction channels limit the required adjustment in the monetary stance, fiscal expansion does opposite.
Optimal response might be smaller for exogenous supply disruption than for demand shock.”
ECB FAQs
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy for the region. The ECB primary mandate is to maintain price stability, which means keeping inflation at around 2%. Its primary tool for achieving this is by raising or lowering interest rates. Relatively high interest rates will usually result in a stronger Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
In extreme situations, the European Central Bank can enact a policy tool called Quantitative Easing. QE is the process by which the ECB prints Euros and uses them to buy assets – usually government or corporate bonds – from banks and other financial institutions. QE usually results in a weaker Euro. QE is a last resort when simply lowering interest rates is unlikely to achieve the objective of price stability. The ECB used it during the Great Financial Crisis in 2009-11, in 2015 when inflation remained stubbornly low, as well as during the covid pandemic.
Quantitative tightening (QT) is the reverse of QE. It is undertaken after QE when an economic recovery is underway and inflation starts rising. Whilst in QE the European Central Bank (ECB) purchases government and corporate bonds from financial institutions to provide them with liquidity, in QT the ECB stops buying more bonds, and stops reinvesting the principal maturing on the bonds it already holds. It is usually positive (or bullish) for the Euro.
OCBC’s Christopher Wong reports South Korean Won (KRW) led declines in Asia FX, pressured by higher Oil, firmer UST yields, softer risk tone and heavy foreign equity outflows. He expects USD/KRW to stay choppy and vulnerable if Oil remains elevated and risk sentiment fragile, but advises against chasing the pair higher. Wong prefers fading rallies, citing Korea’s AI/export leverage and resilient semiconductor cycle as medium-term supports.
KRW pressured but rallies seen to fade
"KRW came under renewed pressure overnight and led declines in Asian FX."
"Near term, USDKRW can remain choppy and vulnerable to wider swings, especially if oil prices stay elevated and global risk sentiment remains fragile."
"we would avoid chasing USD/KRW higher from here and would look to fade rallies selectively for better risk-reward, as Korea’s AI/export leverage and still-resilient semiconductor cycle remain medium-term supports once the geopolitical/rates impulse settles."
"USD/KRW last seen at 1493 levels. Daily momentum turned mild bullish while RSI rose."
"Near term risks skewed to the upside. Resistance at 1501, 1510 levels (23.6% fibo retracement of 2026 low to high). Support at 1474/78 levels (21DMA, 50% fibo). Bias to sell rallies."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
The European Central Bank (ECB) Chief Economist Philip Lane crossed the wires, saying that the energy shock caused by the Iran war will require a restrictive policy at a conference in London.
Lane said that “a mid-size but not-too-persistent overshoot could warrant some measured adjustment,” adding that the response has to be “appropriately forceful or persistent” on
Lane reaffirmed the ECB's line that "a mid-size but not-too-persistent overshoot could warrant some measured adjustment" while the response had to be "appropriately forceful or persistent" would require a firmer or longer-lasting policy reaction.
EUR/USD reaction on the headline
The EUR/USD bounced off around the 1.1700 figure, past the 100-day Simple Moving Average (SMA) of 1.1708, which could open the door for further gains. Up next is the 20-day SMA at 1.1730.
ECB FAQs
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy for the region. The ECB primary mandate is to maintain price stability, which means keeping inflation at around 2%. Its primary tool for achieving this is by raising or lowering interest rates. Relatively high interest rates will usually result in a stronger Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
In extreme situations, the European Central Bank can enact a policy tool called Quantitative Easing. QE is the process by which the ECB prints Euros and uses them to buy assets – usually government or corporate bonds – from banks and other financial institutions. QE usually results in a weaker Euro. QE is a last resort when simply lowering interest rates is unlikely to achieve the objective of price stability. The ECB used it during the Great Financial Crisis in 2009-11, in 2015 when inflation remained stubbornly low, as well as during the covid pandemic.
Quantitative tightening (QT) is the reverse of QE. It is undertaken after QE when an economic recovery is underway and inflation starts rising. Whilst in QE the European Central Bank (ECB) purchases government and corporate bonds from financial institutions to provide them with liquidity, in QT the ECB stops buying more bonds, and stops reinvesting the principal maturing on the bonds it already holds. It is usually positive (or bullish) for the Euro.
- US producer prices surge, reinforcing higher-for-longer Fed rate expectations.
- Gold is pressured by US Treasury yields and a rise in the US Dollar.
- Iran war inflation risks keep markets defensive ahead of US data.
Gold (XAU/USD) price edges lower during Wednesday’s session following another high inflation print in the US: input prices for producers, which hit their highest level in four years. At the time of writing, the XAU/USD pair trades at $4,699, down some 0.30%.
XAU/USD weakens as sticky inflation dampens Fed cut hopes
The market is in a risk-off mood for two consecutive days amid spiking US inflation due to the US-Iran war. In the meantime, US President Donald Trump arrived in Beijing for the US-China summit.
The chances for a peace deal are shrinking, while Trump stated that Iran would be decimated if they don’t sign a deal. Tehran’s demands include lifting sanctions, unfreezing funds, reparations for war damage, and sovereignty over the Strait of Hormuz.
On Tuesday, Trump added that he doesn’t need China’s help to end the conflict.
Recently, the US Producer Price Index (PPI) rose sharply in April by 6% YoY, exceeding March’s 4.3% rise. Excluding volatile items, the so-called Core PPI increased by 5.2% YoY, up from March’s 4%, above forecasts of 4.3%. A day ago, consumer inflation rose 3.8% YoY, the highest since 2023.
Consequently, US Treasury yields jumped, with the 10-year yield up 2.5 basis points to 4.488%. The US Dollar Index (DXY), which measures the Greenback against six major currencies, rose 0.21% to 98.49.
Money markets do not expect adjustments to the Fed funds rate, as data from Prime Terminal suggests the Fed will keep rates unchanged throughout 2026.
Fed implied forward rates
In the meantime, Boston Fed Susan Collins said that rate hikes would be needed if inflation fails to get towards the central bank’s 2% goal. She added that she expects to keep the restrictive policy. At the same time, Minneapolis Fed Neel Kashkari, a voter in 2026, said that inflation is running too high due to the Iran war and that the labor market looks better.
Ahead in the week, the US economic schedule will feature Initial Jobless Claims for the week ending May 9, Retail Sales data, and speeches by Fed officials Schmid, Hammack, Williams, and Barr.
XAU/USD technical outlook: Gold’s advance capped at $4,700 as bears lurk
Gold price is struggling to clear $4,700, as key resistance levels lie overhead, with the 50- and 100-day Simple Moving Averages (SMAs) at $4,749 and $4,780, respectively. Price action is contained within the $4,650 - $4,700 area, but US economic data has remained solid, opening the door for further downside.
Momentum tilted bearish as the Relative Strength Index (RSI) slipped below the 50 neutral level.
With that said, Gold’s first seen at the 20-day SMA near $4,683, followed by the $4,600 level. Below that, the next key area is May 4 swing low around $4,500.
Upwards, initial resistance sits at $4,700. A break above it would bring the 50-day SMA at $4,749 into view; beyond that, bulls could aim for the 100-day SMA near $4,780 and then the $4,800 figure.
Gold FAQs
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
BNP Paribas analyzes how Indonesia’s decision to cap fuel prices and increase subsidies leaves its public finances exposed if Brent Oil averages USD 92–100 in 2026. The bank estimates subsidy costs near 0.6% of GDP and warns that Indonesia’s fiscal deficit could breach the 3% of GDP cap, while its debt structure remains vulnerable to rising US long-term yields.
Subsidies strain deficit and debt profile
"The cost is estimated at between 0.2% of GDP in Malaysia and 0.6% of GDP in Indonesia, assuming that currencies stabilise at current levels, as any further depreciation against the dollar would automatically increase the cost incurred."
"Indonesia, like India, Malaysia and Thailand, has the capacity to absorb this new shock to its public finances."
"Indonesia’s fiscal deficit could exceed the 3% of GDP threshold set by parliament in 2026 (unless the government reduces significantly other kind of expenditures), which would cause significant concern among foreign investors."
"The most exposed country would be Indonesia, whose domestic market is too small to cover the government’s financing needs and offset any tightening of financing conditions on international markets."
"By contrast, although modest (40.5% of GDP), the structure of the Indonesian government’s debt is viewed as the most fragile among the countries studied."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Neel Kashkari, President of the Federal Reserve (Fed) Bank of Minneapolis, spoke at a St. Paul Area Chamber event in St. Paul, Minneapolis, on Wednesday. He said that the big question is how long the Strait of Hormuz will be closed and what effect will it have on inflation.
Key takeaways:
Inflation too high.
A huge question mark about how long Hormuz Strait will be closed, that will have a big effect on inflation.
Need to get back to 2% inflation, should not move the goalpost.
Inflationary shocks don't let the Fed off the hook, but have made the job challenging on inflation.
Before Iran conflict, had some confidence inflation was heading back down to 2%.
Labor market moving sideways, 'lukewarm'.
Iran shock has upended inflation environment.
Labor market looks like it's hanging in there.
Not sure Fed's policy rate decisions will have much effect on mortgage rates.”
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.29% | 0.19% | 0.21% | 0.09% | -0.23% | 0.34% | 0.26% | |
| EUR | -0.29% | -0.10% | -0.11% | -0.23% | -0.53% | 0.04% | -0.06% | |
| GBP | -0.19% | 0.10% | 0.00% | -0.11% | -0.41% | 0.17% | 0.04% | |
| JPY | -0.21% | 0.11% | 0.00% | -0.10% | -0.43% | 0.12% | 0.06% | |
| CAD | -0.09% | 0.23% | 0.11% | 0.10% | -0.33% | 0.25% | 0.14% | |
| AUD | 0.23% | 0.53% | 0.41% | 0.43% | 0.33% | 0.57% | 0.47% | |
| NZD | -0.34% | -0.04% | -0.17% | -0.12% | -0.25% | -0.57% | -0.11% | |
| CHF | -0.26% | 0.06% | -0.04% | -0.06% | -0.14% | -0.47% | 0.11% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
- USD/JPY extends gains for a third straight day as hotter US inflation data boosts Fed rate hike expectations and supports the US Dollar.
- Rising Oil prices linked to the Middle East war continue to pressure the Japanese Yen given Japan’s heavy dependence on imported energy.
- Technically, USD/JPY holds above key moving averages while momentum indicators suggest the recent intervention-driven sell-off may be stabilizing.
USD/JPY trades with a mild upside bias on Wednesday as the Japanese Yen (JPY) remains under pressure from a stronger US Dollar (USD) and rising Oil prices linked to the Middle East war, given Japan’s heavy reliance on imported energy.
At the time of writing, USD/JPY is trading around 157.87, up for a third consecutive day. The US Dollar is drawing support from hotter-than-expected US inflation data, which boosted expectations that the Federal Reserve (Fed) could raise interest rates by year-end, while persistent uncertainty surrounding US-Iran negotiations to end the war is driving safe-haven flows into the Greenback.
The US Dollar Index (DXY), which tracks the USD against a basket of six major currencies, is trading around 98.50, its highest level in more than a week.
From a technical perspective, buyers are gradually returning after the recent suspected intervention-driven sell-off triggered near the 160.00 psychological level.
USD/JPY trades at 157.85, holding a constructive bias as it remains above the 100-day Simple Moving Average (SMA) at roughly 157.40 and the 200-day SMA near 154.47.
The Relative Strength Index (RSI) on the daily chart has rebounded toward 48 after recently dipping toward oversold territory, suggesting bearish momentum is easing but still lacking strong bullish conviction.
Meanwhile, the Moving Average Convergence Divergence (MACD) remains in negative territory, though the histogram is beginning to stabilize and the MACD line is attempting to turn higher, indicating downside pressure may be fading after the recent sell-off.
On the topside, initial resistance emerges at 158.00, where a horizontal barrier caps immediate advances, ahead of a more significant ceiling near 160.73 that guards the recent highs.
On the downside, the 100-day SMA at 157.40 offers the first layer of support, with the 200-day SMA around 154.47 providing a deeper structural floor if selling pressure extends.
Inflation FAQs
Inflation measures the rise in the price of a representative basket of goods and services. Headline inflation is usually expressed as a percentage change on a month-on-month (MoM) and year-on-year (YoY) basis. Core inflation excludes more volatile elements such as food and fuel which can fluctuate because of geopolitical and seasonal factors. Core inflation is the figure economists focus on and is the level targeted by central banks, which are mandated to keep inflation at a manageable level, usually around 2%.
The Consumer Price Index (CPI) measures the change in prices of a basket of goods and services over a period of time. It is usually expressed as a percentage change on a month-on-month (MoM) and year-on-year (YoY) basis. Core CPI is the figure targeted by central banks as it excludes volatile food and fuel inputs. When Core CPI rises above 2% it usually results in higher interest rates and vice versa when it falls below 2%. Since higher interest rates are positive for a currency, higher inflation usually results in a stronger currency. The opposite is true when inflation falls.
Although it may seem counter-intuitive, high inflation in a country pushes up the value of its currency and vice versa for lower inflation. This is because the central bank will normally raise interest rates to combat the higher inflation, which attract more global capital inflows from investors looking for a lucrative place to park their money.
Formerly, Gold was the asset investors turned to in times of high inflation because it preserved its value, and whilst investors will often still buy Gold for its safe-haven properties in times of extreme market turmoil, this is not the case most of the time. This is because when inflation is high, central banks will put up interest rates to combat it. Higher interest rates are negative for Gold because they increase the opportunity-cost of holding Gold vis-a-vis an interest-bearing asset or placing the money in a cash deposit account. On the flipside, lower inflation tends to be positive for Gold as it brings interest rates down, making the bright metal a more viable investment alternative.
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