Gold Price Forecast: XAU/USD bounces off 3-day lows and breaks above $1,910

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  • US Retail Sales plunged, while PPI preliminary showed inflation continuing to subside.
  • US Industrial Production contracts for two consecutive months.
  • Gold Price Analysis: A daily close above $1,900 is needed to exacerbate a rally to $2,000.

The price of gold It breaks two days of consecutive losses, gaining traction on Wednesday, as the US dollar (USD) falls to eight-month lows, as the US Dollar Index (DXY) shows. The United States (US) showed an improvement in inflation, while retail sales slowed, further cementing the case for the US Federal Reserve (Fed) to rein in its tightening policy. At the time of writing, the XAU/USD pair is trading at $1,914.91.

Retail sales in the United States plummeted

Wall Street opened in the green, boosted by US data. The US Department of Commerce reported that December Retail Sales plummeted -1.1% month-on-month, below estimates of a -0.8% contraction, marking two consecutive months of declines. November figures were revised down from -0.6% to -1.0%. Retail Sales rose 6% annually, unchanged from November data.

PPI softens

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On the inflation front, the US Producer Price Index (PPI) for December falls from -0.1% to -0.5% MoM, which could encourage the Federal Reserve to hike rates significantly . Excluding volatile items like Food and Energy, the so-called core PPI rose 0.1%m/m, unchanged from consensus and down from 0.2% in November. The annual figures showed a PPI increase of 6.2%, below estimates of 6.8%, while the core PPI rose 5.5%, below the 5.7% expected.

US Industrial Production contracted two months in a row

On the other hand, the Federal Reserve reported that US Industrial Production decreased by -0.7% in December and -1.7% in the fourth quarter. In addition, US manufacturing production fell -1.3% last month, although the November data was revised down by -1.3%.

Fed’s Bullard insists on raising rates above 5

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Elsewhere, Fed officials began crossing crosses, led by St. Louis Fed President James Bullard. Louis. Bullard said the Fed should raise rates above 5% “as fast as we can” before pausing rate hikes as the US central bank tries to rein in stagnant inflation. Bullard added that inflation “will likely recede in 2023, but not as quickly as financial markets expect.”

Meanwhile, the Dollar Index (DXY), which tracks the value of the dollar against a basket of six currencies, fell to eight-month lows around 101.528 but has recently regained some ground and is trading around 101.871. . Another reason keeping XAU/USD propped up is falling US Treasury yields, with the 10-year Treasury yield dipping below 3.40% at 3.390% as lost 16 basis points.

Gold Price Analysis: Technical Outlook

From a technical point of view, XAU/USD extended its gains, although it did pull back a bit from its daily highs of $1,925.88, likely influenced by a slight recovery in the greenback and the Relative Strength Index (RSI) entering conditions. overbought. The Rate of Change (RoC) suggests that buying pressure is starting to ease. If XAU/USD fails to make a daily close above $1,900, the downtrend will resume towards the 20-day exponential moving average at $1,862.60. Otherwise, and the path of least resistance, XAU/USD could test the yearly high at $1,928.95, followed by the April 21 high of $1,957.72, before $2,000.


Last price today 1916.55
daily change today 7.36
today’s daily variation 0.39
today’s daily opening 1909.19
daily SMA20 1847.16
daily SMA50 1801.78
daily SMA100 1737.71
daily SMA200 1776.73
previous daily high 1919.16
previous daily low 1903.79
Previous Weekly High 1921.96
previous weekly low 1865.22
Previous Monthly High 1833.38
Previous monthly minimum 1765.89
Fibonacci daily 38.2 1909.66
Fibonacci 61.8% daily 1913.29
Daily Pivot Point S1 1902.27
Daily Pivot Point S2 1895.34
Daily Pivot Point S3 1886.9
Daily Pivot Point R1 1917.64
Daily Pivot Point R2 1926.08
Daily Pivot Point R3 1933.01

Source: Fx Street

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