Gold Erases Its Post-CPI Drop but Stalls Twice at 4,160 Ahead of PPI

Overnight: September CPI landed at 8:30 AM ET Wednesday at 3.7% y/y, above the 3.6% consensus, driven mostly by gasoline. Gold was at 4,153.70 at 8:25 AM ET and got hit down to 4,087 within 15 minutes, then slid to 4,074.10 at 12:05 PM ET – its lowest since Oct. 7. It settled at 4,105.20 at 5:00 PM ET, down about 1.3% on the day.

Asian session: Gold opened at 4,104 at 6:00 PM ET and dipped to the Asian low of 4,099.90 at 7:05 PM ET before ripping higher from 8:10 PM ET: in ten minutes it ran from 4,116 to 4,142 as San Francisco Fed President Mary Daly's interview hit the wires – more hikes are likely, but there's no rush in October. A second leg at 10:45–11:00 PM ET carried it to the Asian high of 4,161.10 at 11:00 PM ET, right as the DXY bottomed at 101.88. Profit-taking pulled it back to 4,131.90 by 2:00 AM ET, and Asia closed at 4,135.70 – still up about $32 from the open.

London morning: London opened at 4,136 at 3:00 AM ET and gold climbed steadily, clearing 4,150 at 4:00–4:15 AM ET and peaking at 4,160.20 at 5:35 AM ET – exactly a dollar shy of the Asian high. Both runs at 4,160–4,161 were sold. At 6:50 AM ET gold was hovering near 4,154 (gold-api.com 4,155.50–4,156 at 6:59–7:00 AM ET), up about $49 (+1.2%) from yesterday's 4,105 settle. In other words, the entire post-CPI drop has been erased.

Why gold is higher: First, the dollar cooled: the DXY slipped from 102.53 at the Asian open to 102.06 (−0.5%), backing off Wednesday's 18-month high. Second, the 10-year Treasury yield fell to 5.085% (−10.5 bps), a three-week low, with the 2-year at 4.74% – haven money rotated into bonds as Asian tech stocks sold off. Third, the Fed sounded less hawkish: Daly sees no need to hike at the Oct. 27–28 meeting and Bowman wants to wait; FedWatch now shows about 29% odds of an October hike, down from 50% right after CPI. Fourth, oil eased: Brent dropped from 106 to 104.60 (low of 103.40 at 4:20 AM ET) as Washington weighs easing sanctions on 'shadow fleet' tankers, even though Hormuz remains hot – Singapore's GFS Pride was sunk and Iran threatened U.S. warships. Cheaper oil takes some heat off inflation fears. Still, Saxo's Ole Hansen calls gold's technical outlook fragile.

Today's main event: 8:30 AM ET: September PPI (est. +0.6% m/m, prior 0.4%), core PPI (+0.3%, prior 0.2%), retail sales (+0.3%, prior 1.2%) and core retail sales (+0.6%, prior 1.4%) – all four high-impact on ForexFactory – plus initial jobless claims (est. 199K) and the Philly Fed index (est. 28.2). A hot PPI with strong spending would lift the dollar and yields and likely cap the bounce; a soft print could send gold back to test 4,160–4,171. Fed Chair Kevin Warsh speaks at 11:30 PM ET at the IMF–World Bank meetings, another high-impact event.

45-minute technicals: At 4,154, gold has just edged above the 45m BB90 mid (4,151) and MA89 (4,151), with MA34 well below at 4,122; upper band 4,211, lower band 4,091. The 45m MACD is positive but the histogram keeps shrinking (+7.9 at 11:45 PM ET to +2.4) and RSI(14) sits at 61 – the bounce is losing steam. Higher timeframes: the BB90 mid on the 1H (4,160, MA89 4,159), 3H (4,159) and 4H (4,171, MA89 4,170) all sit above price, with the 2H right at its mid (4,154) – the primary trend is still down. H79 filter: the 15m is in an up-channel (price > MA34 4,147 > MA89 4,121), the 5m is flattening around MA34 4,155, and the 30m has not confirmed (MA34 4,130 still below MA89 4,141) – a pullback inside a downtrend that tends to stall at the higher-timeframe mid/MA89 cluster at 4,159–4,171. Daily pivots: P 4,114 · R1 4,154 · R2 4,202 · S1 4,065. Fibonacci of the 4,197 (Oct 13) → 4,074 drop: 50% 4,136, 61.8% 4,150 (already cleared), 78.6% 4,171 – matching the 4H mid. The clean SELL setup: price in 4,160–4,170 enter once price is in the zone and a 45m or 1H candle closes red, or a 1H candle pierces above the BB90 mid and closes back below it (under 4,160), stronger still on a 45m close below the 4,151 mid.