Gold Price Forecast: XAU/USD patiently waiting before challenging $2,200

XAU/USD Current price: $2,178.93

• A souring market mood and caution keep XAU/USD afloat on Monday.
• Investors await an update on the United States Consumer Price Index.
• XAU/USD consolidates gains, slight chance for a corrective slide.

Gold price holds near record highs on Monday, with XAU/USD changing hands at around $2,184 a troy ounce. The bright metal hit $2,195.22 on Friday, as the US Dollar plunged following the release of the United States (US) Nonfarm Payrolls (NFP) report, indicating a healthy job creation level alongside a higher unemployment rate. Additionally, wages rose by less than anticipated, suggesting easing price pressures. Overall, the employment report confirmed the Fed's path towards normalizing the monetary policy.

XAU/USD maintains gains despite the US Dollar turning higher with Wall Street's opening, as the three major indexes quickly turned red. The dismal mood was triggered by the  Survey of Consumer Expectations for February prepared by the New York Federal Reserve. Consumers expect inflation to remain elevated, at 2.7% in the three-year range and up to 2.9% in the five-year perspective.

Investors are also cautious ahead of Tuesday's release of the United States (US) Consumer Price Index (CPI). The February CPI is foreseen at 3.1% YoY, matching January's figure, while the core reading is expected to have eased to 3.7% from 3.9% previously.  

XAU/USD short-term technical outlook

The XAU/USD pair daily chart shows that it holds on to modest gains, with the bullish run losing steam after advancing for nine days in a row. The pair is extremely overbought, although it may enter a consolidative phase instead of a corrective slide, as there are no signs of selling interest. Technical indicators have lost their upward strength but remain at extreme levels as XAU/USD develops over $100 above a bullish 20 Simple Moving Average (SMA). The longer moving averages remain below the latter and also head north, reflecting persistent buying interest.

Gold corrective consolidation is evident in the near term. The 4-hour chart shows XAU/USD seesaws around $2,180 without directional strength. At the same time it remains above a firmly bullish 20 SMA, which advances way beyond above also bullish longer moving averages. Nevertheless, technical indicators turned south, maintaining downward slopes within positive levels. A corrective slide towards $2,140/$2,150 seems likely, although a steeper slide is still out of the picture.

Support levels: 2.174.60 2,166.10 2,145.60  

Resistance levels: 2,189.00 2,200.00 2,215.00