Gold Price Forecast: XAU/USD awaits US inflation to break the monotony around $1,850


  • Gold remains pressured after snapping two-day uptrend the previous day.
  • US dollar strength weighs on metal prices but traditional safe-haven status argues with bears.
  • China inflation numbers, covid updates can entertain traders ahead of US CPI data.

Gold (XAU/USD) traders keep the previous day’s bearish bias while refreshing the intraday low at around $1,845 during Friday’s Asian session as risk-aversion remains in play.

The risk-off mood could be linked to the growing concerns that the surging price pressure to challenge the global economic growth; Additionally weighing the XAU/USD is the cautious mood ahead of the key inflation data from China and the US. It’s worth noting that the European Central Bank (ECB) failed to lift the market’s optimism despite announcing an end to the Quantitative Easing (QE) and a 0.25% rate hike in July.

That said, the White House has already conveyed the risk of higher inflation ahead of today’s US Consumer Price Index (CPI) data while the World Bank (WB) and the Organisation for Economic Co-operation and Development (OECD) have amplified the global recession woes. Furthermore, the return of activity restrictions and mass testing in China, due to the resurgence of covid cases, also weighs on the market sentiment and the gold prices.

Against this backdrop, the Wall Street benchmarks dropped the heaviest in the week whereas the US 10-year Treasury yields also refreshed their monthly high before retreating to 3.04%, around 3.057% at the latest. Further, the US Dollar Index (DXY) also rallied the most in a week while cheering the greenback’s safe-haven status.

Moving on, China’s CPI and Producer Price Index (PPI) data for May, expected 2.2% and 6.4% versus 2.1% and 8.0% in that order, will offer immediate directions to the gold traders ahead of the US CPI. Also important to watch will be the chatters surrounding covid and global economic growth.

Technical analysis

Gold’s sustained trading below a two-day-old resistance line, as well as the convergence of the 200 and 50 HMAs, join steady RSI (14) to keep sellers hopeful.

However, a one-week-old support line near $1,843 tests the pair bears ahead of directing them to the monthly low surrounding $1,828. Following that, the $1,810 and the $1,800 can as the last defenses for the gold buyers.

Alternatively, the aforementioned nearby resistance line, at $1,849 by the press time, precedes the HMA confluence near $1,851 to challenge the precious metal’s recovery. Also acting as an upside barrier is the weekly resistance line surrounding $1,855.

Overall, gold prices eye further downside but needs a trigger to activate the sell-off.

Gold: Hourly chart

Trend: Further weakness expected

Additional important levels

Overview
Today last price 1846.2
Today Daily Change -1.70
Today Daily Change % -0.09%
Today daily open 1847.9
 
Trends
Daily SMA20 1844.41
Daily SMA50 1885.5
Daily SMA100 1889.83
Daily SMA200 1842.02
 
Levels
Previous Daily High 1855.38
Previous Daily Low 1840.09
Previous Weekly High 1874.16
Previous Weekly Low 1828.55
Previous Monthly High 1909.83
Previous Monthly Low 1786.94
Daily Fibonacci 38.2% 1845.93
Daily Fibonacci 61.8% 1849.54
Daily Pivot Point S1 1840.2
Daily Pivot Point S2 1832.5
Daily Pivot Point S3 1824.91
Daily Pivot Point R1 1855.49
Daily Pivot Point R2 1863.08
Daily Pivot Point R3 1870.78

 

 

Share: Feed news

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. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended content

Editors’ Picks

AUD/USD remains heavy near 0.6750 after Australian jobs data

AUD/USD remains heavy near 0.6750 after Australian jobs data

AUD/USD remains under intense selling pressure near 0.6750 in Asian trading on Thursday. Mixed Australian employment data fails to inspire the Australian Dollar while the US Dollar extends the post-Fed recovery amid a cautious market mood. US data awaited. 

AUD/USD News
USD.JPY jumps toward 144.00 on the road to recovery

USD.JPY jumps toward 144.00 on the road to recovery

USD/JPY gains traction and approaches 144.00 in Thursday's Asian session. The uptick of the pair is bolstered by the impressive US Dollar recovery. Investors shift their attention to the US data and the Bank of Japan interest rate decision on Friday. 

USD/JPY News
Gold price stalls post-FOMC pullback from all-time peak; lacks firm intraday direction

Gold price stalls post-FOMC pullback from all-time peak; lacks firm intraday direction

Gold price oscillates in a range on Thursday and consolidates the previous day's post-FOMC rejection slide from the $2,600 mark or a fresh record high. Persistent geopolitical risks, along with signs of economic trouble in the US and China, lend support to the safe-haven metal.

Gold News
Ethereum attempts recovery following first rate cut in four years

Ethereum attempts recovery following first rate cut in four years

Ethereum is trading above $2,330 on Wednesday as the market is recovering following the Federal Reserve's decision to cut interest rates by 50 basis points. Meanwhile, Ethereum exchange-traded funds recorded $15.1 million in outflows.

Read more
Australian Unemployment Rate expected to hold steady at 4.2% in August

Australian Unemployment Rate expected to hold steady at 4.2% in August

The Australian Bureau of Statistics will release the monthly employment report at 1:30 GMT on Thursday. The country is expected to have added 25K new positions in August, while the Unemployment Rate is foreseen to remain steady at 4.2%.

Read more
Moneta Markets review 2024: All you need to know

Moneta Markets review 2024: All you need to know

VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.

Read More

Forex MAJORS

Cryptocurrencies

Signatures