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Gold Price Forecast: XAU/USD declines as bears gather traction ahead of US CPI

  • The XAU/USD retreated to $2,025 on Friday, registering losses of 0.40% on the day.
  • Despite soft CPI revisions, the metal failed to gather traction.
  • Daily chart indicators hint at a bearish bias, with RSI's negative slope and MACD's rising red bars suggesting selling momentum.
  • In the four-hour chart, indicators appear flat hinting at a consolidation of losses.

In Friday's session, the XAU/USD was observed at a trading level of $2,025, marking a dip of 0.40%. Focus is set on next week’s Consumer Price Index (CPI) figures from January after the US downwardly revised the December figures, to continue placing their bets on the next Federal Reserve (Fed) decisions.

In that sense, investors are eyeing the Federal Reserve's moves, as soft CPI revisions seem to have provided a breather for officials considering rate cuts. However, strong Q1 growth predictions in the US market and rising wage pressures amidst a tight job market from the Fed indicate that rate cuts may be delayed. As for now, markets seem to have given up the odds of a cut in March and instead pushed them to May. Next week's inflation reading will be key for the timing of the easing cycle and in case, data justifies the delay of rate cuts, the yellow metal metal may see further downside

XAU/USD technical analysis

Technical indicators on the daily chart initially depict a dominance of selling pressure. The Relative Strength Index (RSI) is on a descending slope and is hovering in the negative domain, suggesting that bearish momentum is currently prevailing. Simultaneously, the Moving Average Convergence Divergence (MACD) displays growing red bars, reinforcing the strength of the selling momentum. However, the broader perspective reveals a different story. Despite the metal trading under the 20-day Simple Moving Average (SMA), it remains comfortably positioned above the 100 and 200-day SMAs. This inclination highlights the dominance of buying interest in the broader context but that the bears are steadily gaining ground in the short term.

XAU/USD daily chart

Turning attention to the four-hour chart, the selling and buying forces appear to have temporarily reached a stalemate. The indicators have flatlined, illustrating a phase of consolidation following recent losses. The Relative Strength Index (RSI) is notably flat, entrenched within the negative zone, which might hint at a persisting bearish sentiment. The Moving Average Convergence Divergence (MACD) also insinuates a slight shift in momentum with flat red bars, proposing the possibility of a period of consolidation.

XAU/USD

Overview
Today last price2025.15
Today Daily Change-7.89
Today Daily Change %-0.39
Today daily open2033.04
 
Trends
Daily SMA202030.59
Daily SMA502034.11
Daily SMA1001988.78
Daily SMA2001965.98
 
Levels
Previous Daily High2038.72
Previous Daily Low2020.25
Previous Weekly High2065.49
Previous Weekly Low2018.39
Previous Monthly High2079.01
Previous Monthly Low2001.9
Daily Fibonacci 38.2%2027.31
Daily Fibonacci 61.8%2031.66
Daily Pivot Point S12022.62
Daily Pivot Point S22012.2
Daily Pivot Point S32004.15
Daily Pivot Point R12041.09
Daily Pivot Point R22049.14
Daily Pivot Point R32059.56

Author

Patricio Martín

Patricio is an economist from Argentina passionate about global finance and understanding the daily movements of the markets.

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