Gold Price Analysis: XAU/USD fails to scale 50-day SMA even as US inflation expectations rise
|- Gold faces rejection above the 50-day SMA hurdle for the second day.
- US inflation expectations rise to highest since Q2, 2019, but fail to lift gold.
Gold, a proven store of value, struggles to gather upside traction despite the uptick in the US inflation expectations.
The yellow metal is trading at $1,918 per ounce at press time, having faced rejection above the 50-day simple moving average (SMA) at $1,923 early Thursday. Similarly, the bulls failed to keep gains above the key SMA on Wednesday.
The US 5-year, 5-year forward inflation swap rose to 2.20% on Wednesday, the highest level since the second quarter of 2019. While inflation expectations are hovering well above the Federal Reserve's 2% target, the central bank is unlikely to raise rates anytime soon.
That's because the Fed adopted average inflation targetting in August. Under the new strategy, the central bank will allow inflation to rise above 2% for some time before raising rates. Further, markets are pricing additional US fiscal stimulus.
Even so, gold is having a tough time scaling the 50-day SMA. The latest rejection at the technical hurdle could be associated with the bounce in the dollar index, which tracks the greenback's value against major currencies.
The dollar index is currently seen at 92.74, up 0.3% from the low of 92.47 reached Wednesday.
The S&P 500 futures are pointing to risk aversion with a 0.6% decline. As such, the haven demand for the greenback may strengthen, pushing gold lower during the day ahead.
Technical levels
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.