Gold re-approached the $1300 level in overseas trading, buoyed by heightened geopolitical tensions and a toppy-looking dollar. The yellow metal has retreated modestly intraday in the wake of warmer than expected inflation data.
U.S. PPI rose 0.4% in September, stoked by hurricane distortions and in line with expectations. Core PPI jumped +0.4% as well, which was above expectations of +0.2%.
Initial jobless claims fell 15k last week, suggesting that the hurricane effect on labor may already be reversing. However, it remains to be seen if that will be sufficient to reverse the existing downtrend in payrolls that had developed long before this hurricane season.
A move back above $1300 would put gold above the 20- and 50-day moving averages, returning confidence to the dominant uptrend. The halfway back point of the recent correction comes in at 1308.80.