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.

Omkar Godbole FXStreet Contributor

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

XAU/USD

Overview
Today last price	1918.36
Today Daily Change	-6.14
Today Daily Change %	-0.32
Today daily open	1924.5

Trends
Daily SMA20	1898.06
Daily SMA50	1924.95
Daily SMA100	1877.32
Daily SMA200	1758.41

Levels
Previous Daily High	1931.54
Previous Daily Low	1906.22
Previous Weekly High	1933.3
Previous Weekly Low	1882.46
Previous Monthly High	1992.42
Previous Monthly Low	1848.82
Daily Fibonacci 38.2%	1921.87
Daily Fibonacci 61.8%	1915.89
Daily Pivot Point S1	1909.97
Daily Pivot Point S2	1895.43
Daily Pivot Point S3	1884.65
Daily Pivot Point R1	1935.29
Daily Pivot Point R2	1946.07
Daily Pivot Point R3	1960.61

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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