Gold Price Forecast – Technically Stuck Between 2 MAs
Gold experienced a downward trend since the end of December, and last week, it declined further following robust US inflation reports. But, sellers couldn’t keep XAU below $2,000 and the price bounced higher, closing the week above $2,010, Gold found support at the 100 daily SMA.
On Tuesday we had the CPI (Consumer Price Index) report and on Thursday the US PPI (Producer Price Index) showed that inflation remains sticky in the US, which led to reduced expectations of further rate cuts. The market pricing for the FED cuts this year fell below 90 basis points for the first time in several months. Core CPI jumped by 0.4% in January escalated the decline, while positive US PPI data released last Friday caused another minor dip in gold prices. Nevertheless, gold quickly rebounded both times and broke through resistance levels, recovering most of the losses incurred earlier in the week, showing that there’s strong buying pressure below $2,000.
Gold Chart Daily – Gold Bouncing Between the 50 SMA and the 100 SMA
The stronger CPI inflation in particular resulted in higher Treasury rates and which pulled the USD higher as well. So, XAU/USD slipped below $2,000 and it also dipped below $1,990 as well. The price pierced below the 100 SMA (green) on the daily chart as shown above, but there was no daily close below it, so that wasn’t a real breakout, just a stop hunt to flush out some weak positions below the major level at $2,000.
The doji candlestick formed a bullish reversing chart pattern for Gold, with the stochastic indicator also being oversold on this timeframe chart. The price of Gold rebounded higher on Thursday and the buying momentum continued the next day, to close the week above $2,010. However, buyers faced the 50 SMA (yellow) today, and in the first attempt they failed. XAU opened with a bullish gap last night, but buyers couldn’t push above the 50 SMA and the Gold price started to retreat lower. So, XAU is trading between two moving averages, which we will utilize.
Gold Live Chart XAU
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