On Friday (December 13), Gold prices struggled at $2,687 as the U.S. Producer Price Index (PPI) exceeded expectations, and the number of initial jobless claims rose significantly, boosting the strong return of the USD. The market is closely watching the pricing of next week's FOMC interest rate decision, where a rate cut may support Gold prices.

Despite mixed signals from the U.S. economy, the USD remains strong. PPI data exceeded expectations, increasing by 3% year-on-year, indicating potential inflationary pressure. However, the number of first-time jobless claims rose significantly to 242,000, indicating a cooling labor market.

This divergence has left traders uncertain about the Federal Reserve's next move, although the market largely anticipates a 25 basis point rate cut in the upcoming meeting. After the data was released, the USD attempted to break through the Resistance level of 107, putting pressure on Gold and Silver prices.

On Thursday, Gold prices fell sharply, ending a four-day streak of gains. The mixed economic data brought uncertainty, especially with the PPI data being stronger than expected, and the initial jobless claims data being weaker. Spot Gold dropped to $2,680 as traders took profits before the Federal Reserve's decision.

The U.S. 10-Year Treasury Notes Yield rebounded after the PPI data was released, further pressuring Precious Metals. The market's focus remains on the Federal Reserve's next move, as a rate cut may support Gold prices.

Here are FXEmpire Analyst Muhammad Umair's insights on Gold, Silver, and the USD.Technical analysis.：

Gold Technical Analysis

The daily chart of Gold shows that after reaching a peak in October, the price began to consolidate. This consolidation found strong support at the red dot Trendlines at $2540, leading to a strong rebound. As December approaches, the price has been consolidating within a narrow Range since then. From a seasonal perspective, December is typically a month of range fluctuations in the Gold market. However, the price remains above the 50-day and 200-day SMA, indicating that once the consolidation phase is completed, the price will present a positive trend.

(Source: FXEmpire)

A similar consolidation is observed on the 4-hour chart of Gold. The price has been consolidating between $2615 and $2665. After breaking through $2665, the price rose to $2720. After reaching this level, the price retraced to $2665.RSIThis also indicates that the price remains within this Range.

(Source: FXEmpire)

Technical analysis of silver.

The daily chart of Silver shows that for the past year, Silver prices have been trading within an ascending channel. After peaking at the channel's resistance level of $34.80, the price has been declining. Last week's price consolidation occurred within this channel.ResistanceThis consolidation formed a bottom, but the release of Thursday's PPI data caused a significant drop in Silver prices, breaking below the 50-day moving average. This decline indicates that the price is still in a consolidation phase, seeking its next direction.

(Source: FXEmpire)

The 4-hour chart of Silver shows that the price has been trading within a descending expanding wedge pattern. Silver prices failed to break through the wedge pattern in the resistance zone of $32.20 to $32.50, and began to decline after the release of U.S. PPI data. A break below $29.60 could trigger further declines in Silver prices. Conversely, a breakthrough above $32.50 may continue upward to $34.80.

(Source: FXEmpire)

Technical Analysis of the USD

The daily chart of the USD shows that the index found support at the red Trendlines 105.60 and rebounded to the Resistance level of 107. A breakout above 108 could initiate an upward trend for the index. The 50-day moving average crossing above the 200-day moving average indicates a bullish trend. Moreover, the rebound from 105.60 was supported by the RSI midline, suggesting further upward potential.

(Source: FXEmpire)

The 4-hour chart of the USD indicates that the support level at the lower boundary of the upward Range is 105.60, confirmed by a double bottom pattern. The index is currently testing the resistance of the blue dot Trendlines. A breakout above this Trendlines could trigger an upward movement. If the index breaks above 108, it may advance towards the channel resistance at 109.40.

(Source: FXEmpire)