Gold price eases after recovery stalled at key barrier; US CPI eyed for fresh signals
|GOLD
Spot gold holds in red for the second straight day and extends lower after bulls failed to register a clear break above key barrier at $1755 (Mar 18 high) and generate initial signal of double-bottom formation.
Elevated US Treasury yields after US producer prices registered the largest annual gain in 9 ½ years dent metal’s appeal, as recent upbeat US economic data point to accelerating economic recovery, but investors are still cautious.
Key events this week are US inflation on Tuesday and retail sales data on Thursday.
Fed Chair Powell expressed optimism that inflation will accelerate in coming months that would boost the metal, but higher inflation not necessarily means higher gold price (the metal is used a hedge against inflation) as higher yields, on growing expectations of fast economic recovery, would increase the cost of holding metal.
Daily chart indicators point lower (momentum broke into negative territory and stochastic reversed from overbought zone) and support bearish scenario, however, bears need to break pivotal supports at $1731/27 (20DMA / Fibo 38.2% of $1677/$1758 recovery / converged 10/30DMA’s) to signal further weakness at top at $1758.
Res: 1744; 1758; 1766; 1775
Sup: 1727; 1718; 1708; 1700
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.