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Gold recovers some lost ground above $2,030, focus on Chinese CPI, PPI data Gold bounces off the weekly low of $2,013 to $2,030 during the early Asian session on Friday. Nonetheless, the upside of the yellow metal might be limited due to the possibility that the Fed may not begin cutting interest rates as early as expected, which might exert some selling pressure on XAU/USD prices. >Technical Overview XAU/USD trades near a fresh weekly low of $2,013.55, and the daily chart hints at another leg lower. The bright metal was unable to recover beyond a mildly bullish 20 Simple Moving Average (SMA), which rejected advances for a third consecutive day. At the same time, the Relative Strength Index (RSI) indicator maintains a firmly bearish slope at around 44. More neutral, the Momentum indicator heads nowhere around its midline, while the 100 and 200 SMAs converge around $1,962. In the near term, and according to the 4-hour chart, the risk skewed to the downside. Technical indicators head south almost vertically within negative levels, while XAU/USD develops below all its moving averages. Furthermore, the 20 SMA has crossed below the longer ones, providing dynamic resistance at around $2,029.00. Further slides are to be expected with a break below the $2,000 threshold on the table. -Support levels: 2,016.60 1,998.65 1,987.20 -Resistance levels: 2,029.00 2,040.30 2,052.30 >Fundamental Overview Stronger than anticipated United States (US) inflation figures boosted the US Dollar ahead of Wall Street’s opening, putting mild pressure on XAU/USD. The US Dollar traded with a soft tone ahead of the announcement as investors hoped for upbeat figures. However, the Consumer Price Index was up 3.4% YoY in December, higher than the previous 3.1% and the 3.2% expected. The core annual reading came in at 3.9% vs the 3.8% anticipated, while the monthly increase was 0.3%. The US Dollar benefited from a risk-averse environment, as the data suggests the Federal Reserve (Fed) would have to maintain rates higher for longer, as policymakers anticipated multiple times. Higher price pressures weighed down the odds for a rate cut in March. As a result, stocks edged lower, with Wall Street trading in the red, and government bond yields ticked higher. *Source: fxstreet
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