Gold market analysis

"Gold Price in Technical Correction" – Completed on 14/8/2026 at 11:26

The U.S. July PPI rose 4.7% year-on-year, below the expected 4.9% and June's 5.5%. Core PPI increased 4.2% annually, matching expectations but still lower than June’s 4.7%. The data indicates that inflationary pressures driven by soaring oil prices are easing. Markets no longer expect the Federal Reserve to raise interest rates this year, yet gold prices fell instead of rising. One possible reason is profit-taking by investors; another is that although the annual PPI growth has moderated, it remains elevated—likely prompting the Fed to maintain current interest rates rather than cut them.

Cleveland Fed President Harker reiterated the need for immediate rate hikes to bring inflation back to the 2% target. Richmond Fed President Barkin stated it was unclear whether further tightening would be needed to meet inflation goals. Meanwhile, Chicago Fed President Goolsbee expects inflation caused by tariffs and oil prices to be temporary, with a gradual return to stability. However, during the July monetary policy meeting, three members—including Harker—supported a rate hike, highlighting internal divisions within the Fed. Given the current Middle East tensions, slow inflation decline, and weakening labor market, it is likely that interest rates will remain unchanged in September.

Although gold prices continue to fall, the decline appears to be a technical correction, as prices have retraced about 50% from their peak drop since April 17. On the daily chart, gold broke above the 50SMA (currently around 4146) on August 5, crossing the 20SMA (currently around 4172). After reaching a high of $4,450.23 yesterday, gold closed in a bearish engulfing pattern, indicating ongoing short-term selling pressure. A rebound may not occur until early next week. The 20SMA and 50SMA are seen as strong medium-term supports. For most of the day, prices are likely to remain constrained by the hourly 20SMA (currently around 4361), continuing to trend downward along this line. Additionally, tonight’s release of U.S. July retail sales data should be closely watched—if retail activity remains robust, renewed concerns over rate hikes could trigger a sharp drop in gold prices!

The above information is for reference only and does not constitute investment advice.