Gold prices trade with a bullish tilt and remain above the 200-day simple moving average.
During the Asian session on Tuesday, gold price attracted some dip-buying near the highly significant 200-day Simple Moving Average (SMA) support. Halting the overnight drop from the $1,930 region, or a four-day high. The XAUUSD is now trading at $1,923, up marginally for the second consecutive day. But lacks bullish confidence as traders await this week’s data. The latest consumer inflation numbers from the United States (US) will be released on Wednesday.
The Gold upside appears to be restricted ahead of the US CPI on Wednesday and the ECB policy meeting on Thursday.
Following the widely anticipated halt in September. The important US Consumer Price Index (CPI) will give new clues regarding the Federal Reserve’s (Fed) future rate rise path. A better US CPI reading will support market views on the Fed tightening policy. Further, setting the way for a new leg down for the non-yielding Gold price. It is worth noting that markets have priced in the probability of another 25 basis point (bps) increase before the end of this year.
The encouraging US macro data reported this week. Which indicated to a strong economy and should allow the Fed to raise interest rates. Boosted hopes to keep interest rates higher for a longer period of time. The hawkish view continues to support rising US Treasury bond rates. Pushing the US Dollar (USD) to a six-month high last week. The US dollar, on the other hand, saw some profit-taking on Monday and remained at a multi-day low on Tuesday, offering some support to the Gold price.
Furthermore, the pervasive cautious mindset in the equities markets is viewed as another element supporting the precious metal’s safe-haven reputation. Market players continue to be concerned about China’s deteriorating economic situation – the world’s second-largest economy. This, along with concerns about headwinds from quickly rising borrowing costs, dampens investors’ desire for risky assets and sends some refuge flows to the gold price.
Gold Traders, are hesitant to put aggressive orders.
Gold Traders, on the other hand, are hesitant to put aggressive orders. positive bets. And choose to sit on the sidelines in anticipation of the US CPI report. This, together with the highly anticipated European Central Bank (ECB) meeting. On Thursday, could give the gold price a boost. Analysts are divided on whether the ECB will raise interest rates for the tenth time in a row. Despite persistently high inflation or stop its record policy-tightening cycle
In the face of a deteriorating Eurozone economic outlook.
The significant data/central bank event risk will assist investors in determining the next leg of the Gold price’s directional move. As a result, it is recommended to wait for substantial follow-through purchasing before resuming. The recent rebound from the $1,885 zone, or above a five-month trough reached in August.
