US PCE inflation and German inflation in focus
Gold => The commodity rises above 1660
Chevron =>The stock rises to an all-time high
DAX => The index falls towards 13100
Gold rises ahead of US inflation data
Gold fell 0.3% yesterday after two straight days of gains. The precious metal slipped after stronger than forecast US GDP and jobless claims data, which boosted the USD. GDP rose to 2.6% in Q3 ahead of the 2.45% forecast, bringing the US out of a technical recession. Jobless claims also rose by less than expected, highlighting the strength of the US labor market ahead of the non-farm payroll next week. Today gold is holding steady as attention shifts to the US core PCE, which is the Fed’s preferred gauge of inflation and is expected to rise. Hot inflation would support a more hawkish Fed stance a pull gold lower.
Where might the Gold price head to?
Gold has risen from last week’s low of 1618, with the recovery running into resistance at the 20 sma this week at 1670. The RSI is neutral at 50, giving away few clues. Buyers could look for a rise over 1670 to test resistance at 1676, the July low, before exposing the multi-month falling trendline and 20 sma at 1690. A rise above here could bring 1730, the October high, into focus. Meanwhile, failure to break over the 20 sma could see sellers look towards 1617, last week’s low, to create a lower low.
Chevron Q3 earnings preview
Chevron is set to release Q3 earnings after record profits in Q2, and they are expected to be strong again. The oil and gas sector is expected to be a top performer this earnings season, given that the companies are still reaping the rewards of elevated prices. Oil prices have eased from the June peak, and refining margins are also reducing from record levels. Chevron is expected to see slower growth in earnings than its peers. Adjusted EPS is expected to rise 67% to $4.96, up from $2.96 last year. Revenue is expected to jump 28% to$57.4 billion; However, Chevron is returning less cash to investors. Chevron’s share price trades at all-time highs ahead of earnings.
DAX looks to German inflation data
The DAX closed higher yesterday for a fourth straight session and is on track to book a weekly gain of over 3.5%, its fourth straight week of gains. Yesterday the ECB raised interest rates by 75 basis points as expected, and the press conference with Christine Lagarde, ECB governor, had a less hawkish tone, lifting stocks while pulling the euro lower. Today the Dax is heading for a weaker open. Attention will be on German inflation data, which is expected to rise further to a new record high. Hot inflation could mean further rate hikes from the ECB, potentially tipping the economy into recession.
|Ger. CPI||Expected: 10.1% (0.1%)|
Support can be found at 12725 (20 sma) and 12385 (July low).
Resistance for the index can be seen at 13250 (falling trendline) and 13575 (September high).