This Monday, the gold price began the week on a strong note, reaching its highest level in six weeks just shy of the $1,900 mark.
The US Consumer Price Index is the last chance for the US Dollar.
The resurgence of dovish US Federal Reserve (Fed) predictions, along with mixed US Nonfarm Payrolls (NFP) statistics. And the Silicon Valley Bank (SVB) repercussions, has impacted heavily on the US Dollar (USD). While driving up the price of gold. However, the focus now shifts to the release of the United States Consumer Price Index (CPI). On Tuesday for further clues on the March Federal Reserve rate rise action.
On an annualized basis, the Consumer Price Index is predicted to fall to 6.0%, while the Core CPI. Which excludes volatile food and energy costs, is expected to fall slightly to 5.5%. from 5.6% in January. Nevertheless, the headline CPI is expected to dip 0.4% MoM in February. Following a 0.5% increase in January. In the reporting month, the Core CPI is expected to remain stable at 0.4% MoM. Softer-than-expected US inflation statistics might add more legs to the US Dollar’s continuous decline. As the gold price could continue its march towards the $2,000 mark.
The US Dollar supporters require an increase in the US Consumer Price Index to rekindle hawkish Fed views and halt the gold price gain.
Gold Technical Analysis
The gold price has decisively broken over the modestly bullish 50-Daily Moving Average (DMA) at $1,873, extending Friday’s gains to six-week highs of $1,895. Gold bulls have taken a breather before continuing their advance.
The price might retest the 50DMA resistance-turned-support, below which the daily low of $1,868 could be tested.
Any drop in gold prices, however, looks to be limited, as the 14-day Relative Strength Index (RSI) remains safely above the midline. To challenge the $1,900 level, gold bulls will need to break clear of the intraday high at $1,895.
A daily close above the latter is required to start a serious rally towards the year-to-date highs of $1,960.Prior doing it, the February 3 high of $1,919 must be scaled by gold buyers.
