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Gold Price Forecast: XAU/USD remains defensive above $1,900 ahead of US inflation.

  • The price of gold is moving lower on Tuesday from the high of five weeks.
  • Interest rate futures suggest a turn in Fed policy in March, compared with expectations last week for a 50 basis point rate hike.
  • Corrective bounce in yields tests XAU/USD bulls ahead of February US CPI.

The price of gold (XAU/USD) moves slightly lower during the European session on Tuesday as traders struggle to justify mixed catalysts ahead of key US Consumer Price Index (CPI) data. At time of writing, XAU/USD falls close to 0.60% on the day in the region of $1,902.

The latest losses in the precious metal could be related to the corrective bounce of the US dollar, while US Treasury yields are closely monitored. Yields on the 10-year US Treasury note slight gains around 3.58%, after rebounding from the monthly low of 3.418%, while the 2-year bond rebounds from the lowest levels since September 2022 for mild brands gains around 4.19% at the time of writing. It should be noted that the 2-year US Treasury yield posted its biggest daily drop since 1987 the previous day.

Elsewhere, the DXY Dollar Index bounces from 1-month lows to break a three-day downtrend near 103.90, up 0.27% intraday.

It is worth noting that fears emanating from the falls of Silicon Valley Bank (SVB) and Signature Bank have recently reversed the hawkish expectations of the Federal Reserve (Fed) and have challenged the USD bulls of late. “Traders see a 33% chance the Fed will hold rates this month; market prices show that rate cuts are expected as early as June,” the CME said. Along the same lines, Reuters mentioned that “US Fed Funds Futures have priced a 69% chance of a 25 basis point hike at next week’s Fed policy meeting, with a more than 30% chance of a pauseThe news also adds that last week the market was primed for a 50 basis point rally before the SVB collapsed.

It is also likely that the price of gold will weigh on the Latest fears surround China and Russia as the UK, US and Australia over nuclear submarine issues as Washington meets Taiwan leader. However, hopes for further investment in China and the recent rise in hopes for a gradual recovery of the dragon nation, according to Bloomberg, favor XAU/USD bulls.

Later in the day, the US CPI will be the most important event for gold traders as expectations around the Fed have already reversed. According to market forecasts, US headline CPI likely to slow to 6.0% yoy vs. 6.4% prior, while Core CPI could fall to 5.5% yoy from 5.6% prior.

Gold Price Technical Analysis

The downside breakout of a two-day-old uptrend channel joins a bearish signal from the MACD and a firmer RSI to keep gold sellers hopeful. However, the 21-period EMA supports the immediate fall of XAU/USD near the level of $1,900.

Further down, the 38.2% Fibonacci retracement of the rally since February 28, near $1,873may act as a support before the gold price falls towards the March 6 high near $1,858.

However, it should be noted that the level of the EMA 200 around $1,851 could act as a last defense for XAU/USD buyers.

On the other hand, the recovery of the price of gold remains difficult unless it recovers above the lower line of the channel, near the $1,921 .

Should XAU/USD hold firm beyond $1,921, the previous monthly high around $1,960 could attract bulls.

Gold price 1 hour chart


Trend: Bullish

gold additional levels


Last Price Today 1901.94
Today’s Daily Change -11.83
Today’s Daily Change % -0.62
Today’s Daily Open 1913.77
20 Daily SMA 1838.45
SMA of 50 Daily 1872.87
SMA of 100 Daily 1813.1
SMA of 200 Daily 1775.42
Previous Daily High 1914.67
Minimum Previous Daily 1867.66
Previous Weekly High 1870.09
Previous Weekly Minimum 1809.46
Maximum Prior Monthly 1959.8
Minimum Prior Monthly 1804.76
Daily Fibonacci 38.2% 1896.71
Daily Fibonacci 61.8% 1885.62
Daily Pivot Point S1 1882.73
Daily Pivot Point S2 1851.69
Daily Pivot Point S3 1835.72
Daily Pivot Point R1 1929.74
Daily Pivot Point R2 [194571
Daily Pivot Point R3 1976.75

Source: Fx Street

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