- XAU/USD bears are moving in and taking on the daily support structure.
- US CPI will be a key driver for markets that are in wait and see mode.
- The US dollar is consolidating as US yields pull back giving relief to stocks.
The gold price continues to deteriorate despite some relief in the US dollar's advance. At the time of writing, XAU/USD is down some 0.46% at $1,845 while the DXY is trading at 103.85 and up just 0.1%.
The dollar has been choppy on Tuesday, fluctuating between modest gains as traders get set for Wednesday's big event in the US Consumer Price Index which could give clues on the likely path of the Federal Reserve's monetary policy.
Investors have been in a risk-on mood, as the yield on the benchmark US 10-year note eased back below the 3% psychological level and from the highest levels since 2018 at 3.20% scored on Monday. This has given some relief to US equity benchmarks that have been mixed in choppy trade. The Dow Jones Industrial Average has recovered to flat, with the S&P 500 up come 0.55%. The Nasdaq Composite is higher by some 1.9%.
However, the outlook is not so bullish for gold, according to analysts at TD Securities.
''Systematic trend followers are joining into the liquidation vacuum in gold. Finally, trend signals have sufficiently deteriorated to catalyze a substantial selling program in gold. With gold prices challenging the psychologically important $1850/oz range, the additional CTA flow could be sufficient to spark a breakdown in this technical level.''
Eyes on US CPI
Tomorrow's CPI is expected to rise by 0.5% MoM in April and headline to rise by 0.3%, as food and energy prices eased, according to analysts at ANZ bank. ''Inflation has probably peaked on a YoY basis, but monthly inflation trends remain stubbornly high and above rates consistent with 2%. Fed Chair Powell wants to reduce the excessive demand in the labour market by achieving a reduction in job openings without unemployment rising. Navigating that path will be challenging.''
Gold technical analysis
The price has fallen through the bottom of 4-hour support and is now testing daily support as follows with the focus now on $1,820 to the downside:
The M-formation is a reversion pattern so there could be a meanwhile bid at this juncture on failures to crack the daily support initially.
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
Editors’ Picks
EUR/USD trades weak below 1.0800 amid Good Friday lull, ahead of US PCE
EUR/USD continues its downward trend for the fourth consecutive day, driven by a stronger US Dollar influenced by the hawkish market sentiment surrounding the Federal Reserve and expectations of prolonged higher interest rates.
GBP/USD: The first downside target is seen at the 1.2600–1.2605 zone
GBP/USD trades on a weaker note around 1.2620 during the early European session on Friday. The decline of Pound Sterling is backed by the growing speculation that the BoE will begin the rate-cut cycle this year.
Gold ends Q1 2024 at record highs, what’s next?
Gold is sitting at an all-time high of $2,236, lacking a trading impetus amid holiday-thinned conditions on Good Friday. Most major world markets, including the United States are closed in observance of Holy Friday, leaving volatility around Gold price highly subdued.
Ripple's move above this key level could trigger nearly 50% rally for XRP
Ripple price has overcome a critical resistance level and flipped into a support floor on the weekly time frame. This development happened while XRP tightly consolidated for roughly 250 days.
US core PCE inflation set to ease in February on month as Federal Reserve rate cut bets for June mount
The core Personal Consumption Expenditures Price Index is set to rise 0.3% MoM and 2.8% YoY in February. The revised Summary of Projections showed that policymakers upwardly revised end-2024 core PCE forecast to 2.6% from 2.4%.