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- Gold price is consolidating the previous bounce from the key 200-day SMA support.
- US Dollar is regaining lost ground as sentiment turns cautious ahead of key US inflation data.
- Gold price could revert toward 200-day SMA as RSI still remains below the 50 level.
Gold price is holding the rebound from in three-week low of $1,932 early Tuesday, as risk sentiment remains in a weak spot in the lead-up to the top-tier economic data from the US. Amidst a cautious market mood, the United States Dollar (USD) is attempting a comeback even as the US Treasury bond yields trade listlessly.
Will Gold price rebound on US Consumer Price Index data?
The Asian equities pared gains while the US S&P 500 futures trade modestly flat, as traders refrain from placing any fresh bets on riskier assets ahead of the all-important US Consumer Price Index (CPI) data due later in the day. Additionally, renewed concerns over China’s slowdown keep investors on the edge. These factors have led to a revival in the demand for the safe-haven US Dollar, capping the renewed upside in the Gold price.
However, Gold price continues to draw support from a sluggish performance in the US Treasury bond yields across the curve, as traders await the US inflation data to reprice the expectations around the US Federal Reserve’s (Fed) interest rates outlook. The US annual CPI is seen rising 3.3% in October, as against a 3.7% increase in September. The Core figure is expected to rise 4.1% YoY in October, at the same pace as seen in September. The monthly headline inflation is seen falling to 0.1% in the reported period.
In case the headline annual CPI unexpectedly comes in hotter than expected, it could bolster hawkish Fed expectations, fuelled recently by Fed Chair Jerome Powell. At an event on Friday, the Fed President said that “the Federal Open Market Committee is committed to achieving a stance of monetary policy that is sufficiently restrictive to bring inflation down to 2 percent over time; we are not confident that we have achieved such a stance.”
Hotter US inflation data could trigger a fresh leg down in Gold price but in case the CPI disappoints the Fed hawks, the bright metal could catch a fresh bid and resume its recovery momentum toward the $1,970 round figure.
Gold price technical analysis: Daily chart
Gold price rebounded firmly from the critical 200-day Simple Moving Average (SMA) at $1,935 on Monday but remains at risk of further decline as the 14-day Relative Strength Index (RSI) continues to hold below the 50 level.
Daily closing below the latter is needed to fuel a sustained downtrend. The initial demand area will be then seen near $1,925, where the 100-day SMA and 50-day SMA hang around.
If the above support fails to hold, a sharp drop toward the October 16 low of $1,908 cannot be ruled out.
On the road to recovery, Gold buyers will need to take out Friday’s high of $1,961 to recapture the 21-day SMA at $1,970 en-route the $1,980 round figure.
- Gold price is consolidating the previous bounce from the key 200-day SMA support.
- US Dollar is regaining lost ground as sentiment turns cautious ahead of key US inflation data.
- Gold price could revert toward 200-day SMA as RSI still remains below the 50 level.
Gold price is holding the rebound from in three-week low of $1,932 early Tuesday, as risk sentiment remains in a weak spot in the lead-up to the top-tier economic data from the US. Amidst a cautious market mood, the United States Dollar (USD) is attempting a comeback even as the US Treasury bond yields trade listlessly.
Will Gold price rebound on US Consumer Price Index data?
The Asian equities pared gains while the US S&P 500 futures trade modestly flat, as traders refrain from placing any fresh bets on riskier assets ahead of the all-important US Consumer Price Index (CPI) data due later in the day. Additionally, renewed concerns over China’s slowdown keep investors on the edge. These factors have led to a revival in the demand for the safe-haven US Dollar, capping the renewed upside in the Gold price.
However, Gold price continues to draw support from a sluggish performance in the US Treasury bond yields across the curve, as traders await the US inflation data to reprice the expectations around the US Federal Reserve’s (Fed) interest rates outlook. The US annual CPI is seen rising 3.3% in October, as against a 3.7% increase in September. The Core figure is expected to rise 4.1% YoY in October, at the same pace as seen in September. The monthly headline inflation is seen falling to 0.1% in the reported period.
In case the headline annual CPI unexpectedly comes in hotter than expected, it could bolster hawkish Fed expectations, fuelled recently by Fed Chair Jerome Powell. At an event on Friday, the Fed President said that “the Federal Open Market Committee is committed to achieving a stance of monetary policy that is sufficiently restrictive to bring inflation down to 2 percent over time; we are not confident that we have achieved such a stance.”
Hotter US inflation data could trigger a fresh leg down in Gold price but in case the CPI disappoints the Fed hawks, the bright metal could catch a fresh bid and resume its recovery momentum toward the $1,970 round figure.
Gold price technical analysis: Daily chart
Gold price rebounded firmly from the critical 200-day Simple Moving Average (SMA) at $1,935 on Monday but remains at risk of further decline as the 14-day Relative Strength Index (RSI) continues to hold below the 50 level.
Daily closing below the latter is needed to fuel a sustained downtrend. The initial demand area will be then seen near $1,925, where the 100-day SMA and 50-day SMA hang around.
If the above support fails to hold, a sharp drop toward the October 16 low of $1,908 cannot be ruled out.
On the road to recovery, Gold buyers will need to take out Friday’s high of $1,961 to recapture the 21-day SMA at $1,970 en-route the $1,980 round figure.
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