Gold Price Forecast: XAU/USD approaches $1,970 as USD Index’s pullback seems less confident, US CPI eyed

Gold price is marching towards the $1,970.00 resistance as the recovery move in the USD Index could conclude sooner.
Easing US labor market conditions have improved the odds of a neutral policy stance by the Fed.
Gold price is gathering strength for a breakout of the Symmetrical Triangle chart pattern.

Sagar Dua FXStreet

Gold price (XAU/USD) has resumed its upside journey towards the $1,970.00 resistance in the European session. The precious metal is repossessing the spotlight as the recovery move in the US Dollar Index (DXY) seems less confident due to the absence of fundamental support.

S&P500 futures have surrendered half of the gains posted on Thursday as investors are shifting their focus toward the release of the United States Consumer Price Index (CPI) data. Market sentiment has turned cautious as the US inflation release could bring variation in expectations for the Federal Reserve (Fed) policy for June.

As per the preliminary report, headline inflation is seen softening to 4.2% vs. the prior release of 4.9%. Core CPI that strips off oil and food prices is expected to accelerate marginal to 5.6% vs. the former release of 5.5%. If core inflation continues to remain persistent, Fed chair Jerome Powell could be more favorable for the continuation of the policy-tightening spell.

Earlier, the street was divided about Fed’s policy stance but now easing labor market conditions have improved the odds of a neutral policy stance by the Fed. The USD Index has extended its recovery to near 103.60. Also, the yields offered on 10-year US Treasury bonds have climbed to 3.74%.

Gold technical analysis

Gold price is gathering strength for a breakout of the Symmetrical Triangle chart pattern formed on an hourly scale. A breakout of the neutral triangle results in wider ticks and heavy volume. The precious metal is hovering near the downward-sloping trendline of the aforementioned pattern plotted from June 02 high at $1,983.50.

The yellow metal is trading above the 50-period Exponential Moving Average (EMA) at $1,959.70, which adds to the upside filters.

A confident break into the bullish range of 60.00-80.00 by the Relative Strength Index (RSI) (14) will trigger the upside momentum.

Gold hourly chart

XAU/USD

Overview
Today last price	1963
Today Daily Change	-2.40
Today Daily Change %	-0.12
Today daily open	1965.4

Trends
Daily SMA20	1967.42
Daily SMA50	1990.56
Daily SMA100	1940.93
Daily SMA200	1840.28

Levels
Previous Daily High	1970.55
Previous Daily Low	1939.72
Previous Weekly High	1983.5
Previous Weekly Low	1932.12
Previous Monthly High	2079.76
Previous Monthly Low	1932.12
Daily Fibonacci 38.2%	1958.77
Daily Fibonacci 61.8%	1951.5
Daily Pivot Point S1	1946.56
Daily Pivot Point S2	1927.73
Daily Pivot Point S3	1915.73
Daily Pivot Point R1	1977.39
Daily Pivot Point R2	1989.39
Daily Pivot Point R3	2008.22

Author

Sagar Dua

FXStreet

Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.

AUD/USD holds above multi-month lows and 0.6900 ahead of Fed's Warsh

AUD/USD struggles to capitalize on the previous day's modest bounce from its lowest level since early July and trades above 0.6900 during the Asian session on Friday. Thursday's disappointing Australian jobs data tempered RBA rate-hike bets, capping the Aussie. The US Dollar (USD), meanwhile, is regaining positive traction as this week's hot US CPI and PPI reports keep Fed rate hike bets firmly on the table. This further keeps a lid on the pair ahead of Fed Chair Kevin Warsh speech.

USD/JPY climbs above 158.00 as USD edges higher ahead of Warsh's speech

USD/JPY attracts some buyers during the Asian session on Friday, building on the overnight bounce from the vicinity of 157.50, or a one-week low, amid the emergence of some US Dollar buying. This week's hot US CPI and PPI reports lifted Fed rate-hike bets, which, along with stable US bond yields and geopolitical uncertainties, help revive USD demand. Traders, however, remain on high alert amid speculation that authorities will step in to prop up the Japanese Yen, which could cap the currency pair ahead of Fed Chair Kevin Warsh's speech.

Gold weakens to $4,150 amid reviving USD demand as traders await Warsh's speech

Gold drifts lower during the Asian session on Friday, reversing part of the previous day's move up amid reviving US Dollar demand. US inflation data released this week reaffirmed bets for at least one Fed rate hike this year, while US bond yields stabilize after Thursday's steep decline. This, along with geopolitical risks, underpins the safe-haven USD, which, in turn, is seen weighing on bullion ahead of Fed Chair Kevin Warsh's speech.

Ethereum reclaims $2,400 as PPI hits 6.3% and yields fall

Ethereum (ETH) is back above $2,400 on Thursday, rebounding from a brief decline toward $2,340, which was sparked by an upside surprise in the US wholesale inflation report. The Producer Price Index (PPI) increased 1.3% monthly and 6.3% annually in September, far above expectations of 0.5% and 5.3%, respectively.

The Iran war will eventually end. Tariffs won't. Here's the problem

Two cost shocks are in the September Consumer Price Index (CPI), and they have different half-lives. Energy is up 20.4% on the year and accounts for about 1.3 points of the 3.7% headline, and that shock reverses when Oil does: Brent was back at its pre-war price on July 1 and above $100 again by the end of the month, after the ceasefire collapsed on July 8.

Everyone's dumping Gold after hot US inflation. Here's why $4,100 could be a floor, not a cliff

Gold (XAU/USD) is recovering from a sharp sell-off triggered by hotter-than-expected United States (US) inflation data released on Wednesday. The precious metal briefly plunged toward $4,073 as investors increased their bets on further Federal Reserve (Fed) interest rate hikes before recovering as US Treasury yields and the US Dollar (USD) reversed their initial gains.