Breaking: Gold Price Analysis: XAU/USD jumps to over one-week tops, above $1850 post-US CPI
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- Gold gained traction for the fourth consecutive session on Wednesday amid softer USD.
- The USD lost additional ground following the release of softer-than-anticipated CPI figures.
- A combination of factors might keep a lid on any runaway rally for the safe-haven metal.
Gold held on to its modest intraday gains through the early North American session and refreshed one-week tops, beyond the $1850 region post-US CPI figures.
A subdued US dollar demand assisted the dollar-denominated commodity to gain some positive traction for the fourth consecutive session on Wednesday. The intraday buying interest picked up pace following the release of softer-than-expected US consumer inflation report, which showed that core CPI remained flat in January.
Conversely, the headline CPI matched consensus estimates and rose 0.3% MoM. Meanwhile, the yearly rate eased more-than-anticipated to 1.4% and exerted some additional pressure on the greenback. A sustained strength beyond the $1850 level might have already set the stage for an extension of the momentum towards the $1875-76 supply zone.
That said, a combination of factors might hold held bullish traders from placing aggressive bets and keep a lid on any runaway rally for the XAU/USD. The optimism over the progress in coronavirus vaccination has been fueling hopes for a strong global economic recovery. This, along with developments to fast-track the US President Joe Biden's $1.9 trillion COVID-19 stimulus package, continued boosting investors' sentiment and could undermine demand for the safe-haven XAU/USD.
Meanwhile, expectations for a massive US fiscal spending and the prevalent risk-on flow provided a modest lift to the US Treasury bond yields. This might turn out to be another factor that might further contribute towards capping gains for the non-yielding yellow metal.
Technical levels to watch
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