Gold Price Forecast: XAU/USD at $2178 Amid CPI-Driven Volatility Expectations
In the latest gold price forecast, the XAU/USD pair shows a minor retreat in the Asian trading session, yet it hovers close to the recent historic high established last week. Market participants are adopting a cautious stance, keenly awaiting the US consumer inflation data which may shape the Federal Reserve’s approach to interest rates.
As the June meeting approaches, there’s a growing consensus for a rate cut, as reflected in the dip in US Treasury bond yields, applying pressure on the USD and potentially buoying gold prices.
Anticipating the Fed’s Interest Rate Decision
Despite a climb in the US unemployment rate hinting at possible policy shifts by the Fed, Chair Jerome Powell’s recent remarks on persistent inflation dampen prospects for an early rate reduction.
A stronger-than-expected CPI could hint at fewer rate cuts, potentially dampening gold’s appeal in the short term. Conversely, a softer CPI reading might strengthen expectations for an earlier rate cut, lifting the XAU/USD.
US CPI Data Set to Stir Volatility
As all eyes turn to the upcoming CPI release, with core CPI month-on-month at 0.3% against the previous 0.4%, and the year-on-year CPI holding steady at 3.1%, these figures will be pivotal in forecasting short-term moves in gold.
A deviation from these numbers could trigger significant trading opportunities for the precious metal, introducing a fresh bout of volatility for investors and traders alike.
Gold Price Forecast: Technical Outlook
Gold’s luster dimmed slightly in today’s session, with the price retreating by 0.20% to $2178. The four-hour chart shows a pivot point at $2183, which gold has just slipped below, potentially signaling further downside risk.
Resistance levels are layered at $2196, $2214, and $2232, marking hurdles for any potential recovery. On the support front, $2155, $2131, and $2110 are the key levels that could arrest any declines.
The Relative Strength Index (RSI) stands at a lofty 82, often considered an overbought territory, which could foretell a forthcoming pullback. Meanwhile, the 50-day Exponential Moving Average (EMA) at $2132 supports a bullish stance over a longer horizon.