Ella 
In early trading in Asia on Wednesday, gold prices attracted some short sellers near $1,902. The precious metals are facing some selling pressure as the U.S. dollar (USD) rebounds ahead of Friday’s high-profile inflation data. Meanwhile, the U.S. dollar index (DXY), which measures the dollar’s value relative to a basket of foreign currencies, has risen above 106.20, recording its highest level since November.
Economic data released on Tuesday showed that the U.S. Conference Board (CB) consumer confidence index fell to 103.0 in September from 108.7 in August. The data fell to its lowest in four months, showing the impact of higher interest rates and concerns about the political environment. Meanwhile, building permits rose to 1.541 million in August from 1.443 million previously. The house price index rose to 0.8% in July from the previous reading of 0.4%, above the consensus estimate of 0.5%. New home sales fell to -8.7% in August from 8% in July.
The Fed decided last week to keep interest rates unchanged at a range of 5.25% to 5.50%. In terms of macroeconomic forecasts, most members still expect further interest rate hikes later this year. On Tuesday, Minneapolis Federal Reserve President Neel Kashkari said he was among Fed policymakers who believe there will be one more interest rate hike this year. He also said U.S. interest rates may have to be raised further and maintained for longer to cool the economy. The U.S. dollar (USD) was generally boosted by hawkish comments from Federal Reserve officials. It is worth noting that raising interest rates by the Federal Reserve will increase the opportunity cost of investing in zero-yielding assets, which means that the outlook for gold prices is not optimistic.
Gold traders will keep a close eye on Friday’s release of the U.S. core personal consumption expenditures (PCE) price index, the Federal Reserve’s preferred measure of consumer inflation. The U.S. core personal consumption expenditures price index is expected to fall to an annual rate of 3.9% from 4.2%. Traders will take cues from this data and look for gold price trading opportunities.
