Gold Slips Sharply amid Robust US CPI Figures – Quick Daily Outlook

Gold has recovered sharply from a new 2022 low of $1,706.88 per troy ounce and is now trading around $1,738.00. The dollar rose after the

Skerdian Meta•Thursday, July 14, 2022•1 min read

Gold Slips Sharply amid Robust US CPI Figures - Quick Daily Outlook

Gold has recovered sharply from a new 2022 low of $1,706.88 per troy ounce and is now trading around $1,738.00. The dollar rose after the release of the US Consumer Price Index, which increased by 9.1 percent year on year in June, exceeding the 8.8 percent increase expected. The higher-than-expected figure fueled risk aversion as investors rushed to price in the Fed’s more aggressive monetary tightening.

Before the event, financial markets were pricing a 75 basis point increase by the US Federal Reserve, but higher-than-expected figures have put a 100 basis point increase on the table. On the flip side, the likelihood of a 50 basis point increase has dropped to 25%.

With the news, global equities plummeted, US indexes opened with significant losses, while US government bond yields skyrocketed, mirroring fears of a US recession. However, after the opening bell, Wall Street reversed course and recovered most of its early losses, putting more pressure on the US dollar and sending GOLD XAU/USD as high as $1,745.33.

XAU/USD

Gold Technical Outlook

Gold price broke $1730 and closed the daily candlestick below it, reinforcing expectations of the bearish trend continuing in the coming sessions. The path is clear to our next target of $1,700, backed by the negative pressure formed by the EMA 50.

Holding below $1,745 is critical for the expected decline to continue, as breaching it may push the price to test the $1765 area before the new negative attempt.

Today’s trading range is expected to be between $1,700 support and $1,740 resistance.

Today’s expected trend is bearish. Good luck!

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Skerdian Meta

Lead Analyst

Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.