In the meantime, the so-called core PPI, which excludes volatile items, jumped 0.4% month-over-month in January, compared with analysts' expectations for an unchanged reading of 0.2%. Year-over-year, core producer prices grew 1.6% last month, following December's gain of 1.7% and providing support for the view that the Federal Reserve could raise rates in the upcoming months as promised. Back in December, the Central bank raised its overnight rate to a range of 0.50-0.75% and projected three more rate hikes in 2017. The Federal Reserve Chair Janet Yellen said on Tuesday that the Bank would probably increase rates already at its next policy meeting in March. Following Janet Yellen's comments, the US Dollar hit its three-week high against a basket of currencies, while US government bonds dropped markedly.
In the meantime, the so-called core PPI, which excludes volatile items, jumped 0.4% month-over-month in January, compared with analysts' expectations for an unchanged reading of 0.2%. Year-over-year, core producer prices grew 1.6% last month, following December's gain of 1.7% and providing support for the view that the Federal Reserve could raise rates in the upcoming months as promised. Back in December, the Central bank raised its overnight rate to a range of 0.50-0.75% and projected three more rate hikes in 2017. The Federal Reserve Chair Janet Yellen said on Tuesday that the Bank would probably increase rates already at its next policy meeting in March. Following Janet Yellen's comments, the US Dollar hit its three-week high against a basket of currencies, while US government bonds dropped markedly.
Upcoming events: CPI, Retail Sales and Yellen continues to testify
It is the second day of Janet Yellen, chairwoman of the Fed, testifying to the US Congress. That is set to cause the most fluctuations, as the chair of the Federal Reserve is set to give fundamental information regarding US monetary policy. She will begin to testify at 15:00 GMT. However, before that there will be other data releases, which might influence the markets. Particularly, at 13:30 GMT, a package of US fundamental data will be out. The package will consist of US CPI, Core CPI; Retail Sales and Core Retail Sales.
Gold remains near 1,220 level
Daily chart: The yellow metal remained near the 1,220 mark on Wednesday morning. The reason for that is that the markets have still not decided upon the future direction of the commodity price. In the meantime, from a technical perspective all of the bullion's recent moves have been dictated by two levels of significance on the daily chart. From the upside the metal is kept lower by the weekly PP at 1,232.24, and from the downside the bullion is finding support in the first weekly support at 1,219.77 combined with the 38.20% Fibonacci retracement level at 1,219.20.SWFX traders remain bullish
Spreads (avg,pip) / Trading volume / Volatility
Market participants foresee the price of Gold being around 1,250 in May
Traders who were asked regarding their longer-term views on gold between January 15 and February 15 expect, on average, to see the metal near 1,250 in May. Generally, 58% (+1%) of participants believe the price will be above 1,250 in ninety days. Alongside, 32% of those surveyed reckon the currencies will trade in the range between 1,000 and 1,200 over the next three months.