The gold price has plummeted after hitting an intraday low of $1,712.96. The precious metal is under pressure as the US Consumer Price Index consensus falls (CPI). The yellow metal will likely maintain its weak performance and fall to the psychological support level of $1,700.00.

According to market expectations, US inflation will be 8.1%, 40 basis points lower than the previous announcement. Rising price pressures have buffeted the US economy’s households for a long time. As a result, they are obliged to pay more for comparable quantities obtained.

As fuel prices have dropped considerably and the Federal Reserve’s (Fed) rising interest rates have begun to do their job perfectly, price pressures are encountering tiredness signals. However, it is worth noting that gold is regarded as an inflation-hedged asset, and market investors are abandoning the yellow metal due to a weaker consensus on inflationary pressures.

Meanwhile, the US dollar index (DXY) has moved sideways as a lower consensus for the headline CPI data forces Fed policymakers to tone down their hawkishness.

This week’s focus will be on the European Central Bank meeting on Thursday, which is expected to raise interest rates by 75 basis points. Fed fund futures currently predict a 73% possibility of a 75-basis-point rate increase by the United States. The Federal Reserve will hold its policy meeting on September 20-21.

The services industry in the United States expanded for the second consecutive month in August, thanks to stronger order growth and employment, while supply backlogs and price pressures eased, bolstering the perspective that the economy was not in a downturn despite output falling in the first half of the year.

The Institute for Supply Management reported that its non-manufacturing PMI increased to 56.9 in August from 56.7 in July, the second successive monthly gain following three contractions. Advertisement Scroll down to continue Economists polled by Reuters expected the non-manufacturing PMI to fall to 54.9.

A reading above 50 indicates expansion in the services sector, which accounts for more than two-thirds of all economic activity in the United States. The increase in services came on the heels of the ISM manufacturing survey, which showed that factory activity in the United States increased steadily last month, defying a trend in other major economies and offering further evidence that the economy was not in recession despite GDP contracting in the first half of the year.

Gold (XAU/USD) Technical Analysis

Gold price failed to breach the $1,726.60 level, continuing to trade badly and completing the formation of a bearish flag pattern on the chart, putting the XAU/USD price under greater negative pressure in the coming sessions, on its path to negative targets that begin at $1,690.00 and continue to $1,680.00.

As a result, a bearish bias is recommended for today, assuming that a break of $1,726.60 will end the negative scenario and lead to new gains. The projected trading range for today is between $1,690.00 support and $1,726.00 resistance.

Today’s projected trend is bearish.