The price of gold halts a four-day slide but remains close to monthly lows slightly above $1,900.
The price of gold is consolidating weekly losses. And is nearing the lowest point in a month near $1,910 early on Friday. However, a pullback cannot be ruled out. The. As another important set of US economic data is about to be released. The United States Dollar (USD) is holding onto strong overnight recovery gains.
Hawkish Fedspeak prevails over gentle Consumer Price Index for the United States.
On a busy Thursday, the US Dollar saw favorable two-way trading. After an early sell-off due to subdued Consumer Price Index (CPI) inflation data from the US. US headline CPI increased by 3.2% annually. Compared to a 3% growth in June and a 3.3% projection, In July. In the reporting period. The Core CPI inflation rate decreased from the expected 4.8% rate to 4.7% YoY. Both the headline and Core inflation rates for the given month, which came in at 0.2%, were in line with forecasts.
The world’s largest economy’s weaker annual inflation figures strengthened. The case for the US Federal Reserve’s (Fed) planned inaction, pushing the US Dollar substantially lower in step with US Treasury bond yields. As a result, gold’s price continued to rise and tested the round $1,930 mark.
After the US Dollar returned to the scene and followed an outstanding comeback in the US, gold buyers were unable to maintain control and gave in to the negative pressures. when San Francisco Fed President Mary Daly stepped in to help. “We’re going to be watching super core carefully, that’s a big component of spending and it hasn’t made much progress so far, we need to see it come back to pre-pandemic levels,” Daly said in an interview with Yahoo Finance, adding that the central bank still has “more work to do” to combat rising prices. The strong rebound in overnight sessions pushed gold prices falling to new monthly lows at $1,910.
So far in Friday’s trade, gold has entered a phase of downward consolidation, digesting fresh dovish Fedspeak overnight. According to Philadelphia Fed President Patrick Harker, “unless there is any ‘alarming’ new data by mid-September, the stance will remain unchanged.” would be to remain patient and maintain consistent rates.” Meanwhile, Atlanta Fed President Raphael Bostic praised the Fed’s efforts to prevent excessive inflation.
Markets are already weighing in on the odds of a final rate rise this year, as inflation in the United States cools but labor market conditions remain tight. Later in the day, gold dealers will be looking for statistics from the University of Michigan (UoM) on Consumer Sentiment and Inflation Expectations to gain further insight into the Fed’s policy path. Speeches by Fed policymakers will also be important for US Dollar values, as will end-of-week flows, which may provide a small relief to Gold purchasers.
Technical analysis
Technically, little appears to have changed in the near term for the Gold price. As the negative 14-day Relative Strength Index (RSI) maintains its bearish tilt. As a result, any drop in the gold price will be viewed as a favorable selling opportunity.
On the upside, the gold price must break over the $1,930 round number. After which the downward-sloping 50 DMA at $1,941 will be the next major barrier.
Further north, the negative 21 DMA at $1,949 will be on the minds of gold purchasers. Alternatively, a daily close below the important support level of $1,910 will put pressure. On the vital 200 DMA at $1,900.A sustained break below the latter will challenge the June 29 low of $1,883.
