Gold Price Analysis: XAU/USD remains confined in a range, moves little post-US CPI

Gold struggled for a firm direction and remained confined in a range, around the $1855 region through the early North American session.

A combination of diverging factors failed to assist the commodity to build on the previous day's positive move and led to a subdued/range-bound price action, below 50-day SMA. The early uptick once again ran out of the steam near the $1862-63 region, ahead of the 50-day SMA hurdle, though the pullback lacked any strong follow-through selling.

The US dollar regained positive traction amid a modest bounce in the US Treasury bond yields, which, in turn, was seen as one of the key factors that capped gains for the dollar-denominated commodity. In fact, the yield on the benchmark 10-year US government bond stalled its retracement slide from a 10-month high hit on Tuesday and helped revive the USD demand.

Meanwhile, the greenback has a rather muted reaction and moved little following the release of the latest consumer inflation figures. The headline CPI matched consensus estimates and came in to show a 0.4% MoM rise in December. The yearly rate increased by 1.4% as against 1.3% anticipated, though did little to impress the USD bulls.

That said, indications of a cautious opening in the US equity markets extended some support to the safe-haven XAU/USD and helped limit any deeper losses, at least for the time being. This makes it prudent to wait for a sustained move in either direction before positioning for any meaningful intraday trading opportunities.

Technical levels to watch