- Gold plunged to a 5-week low around $1850 as the bears focused on the 100-DMA below $1820.
- Market participants will be watching Tuesday’s US CPI data as a reminder that the disinflationary process has already begun.
- XAU/USD Price Analysis: A close below $1850 will open the way to $1820.
Gold prices retreat from last Friday’s high of $1872.22 and head towards the $1850 territory on Monday despite a fall in the US dollar (USD) ahead of a significant inflation report from the United States (US) fell. Additionally, US Treasury yields, while slightly lower, remain at their highest level in almost five weeks. At the time of writing, XAU/USD is trading at $1852.88.
Gold returns to $1850 as risk-on mood weighs on
XAU/USD continues to come under pressure, with the US Dollar Index, a measure of the dollar’s value against a basket of peers, down 0.18% at 103.391, undermined by the 10-year benchmark US 10-year Treasury yield. 1.5 bps doesn’t even drop to 3.726%.
Investors await a report from the Bureau of Labor Statistics (BLS) on Tuesday that showed the January consumer price index (CPI) was estimated at 6.2% year-on-year, lower than December’s 6.5%. became. Core CPI excludes highly volatile items such as food and energy, which are expected to rise 5.5% year-over-year from 5.7% last month.
Meanwhile, the Fed’s hawkish commentary followed Fed Governor Michelle Bowman’s call for the Federal Reserve (Fed) to raise interest rates to raise the Federal Funds Rate (FFR) to a sufficiently restrictive level. I said I need to continue. Fighting high inflationary pressures.
Recently, the New York Federal Reserve revealed that inflation expectations are holding steady at 5% this year. Three-year inflation fell to 2.7% from 2.9% in December, and five-year inflation was 2.5% against 2.4% the previous month, according to the poll.
XAU/USD Technical Analysis
Technically speaking, XAU/USD remains neutral and is slightly biased downwards. As of typing, the yellow metal has broken below his 50-day Exponential Moving Average (EMA) of $1856.58, adding to the selling pressure. On the downside, support is at 1833.29, the December 26th high, followed by the confluence of the 100- and 200-day EMAs at 1817.77, and the $1800 figure.