The gold price has fallen from six-week highs of $1,915 early Tuesday, halting a three-day rebound run. Gold bulls take a breathe. As the US Dollar (USD) and US Treasury rates recover ahead of the crucial US Consumer Price Index (CPI) data release.
A softer US Consumer Price Index might support dovish Federal Reserve wagers.
After the significant rise caused by the Silicon Valley Bank (SVB) catastrophe. The US bond market is attempting to settle, triggering a sluggish rebound in US Treasury bond rates throughout the curve. On Monday, two-year US Treasury note rates fell as much as 60 basis points (bps) to surpass the 4.0% barrier.
The US Dollar is also gaining strength as a result of position rebalancing ahead of the all-important United States Consumer Price Index (CPI) data coming later this Tuesday at 12:30 GMT. The Consumer Price Index data is expected to fall to 6.0% on an annualized basis, while the Core CPI, which includes volatile food and energy prices, is also predicted 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 contribute to the current narrative that the US Federal Reserve should stop its rate rise cycle in the face of rising financial stability threats. As a result, the US Dollar may see another selling wave. Reinforcing Gold’s march towards the $2,000 mark. If the US CPI data surprises with a high inflation print. Federal Reserve may be forced to make a difficult decision on how to proceed.
Gold Technical Outlook
The gold price found acceptance above the $1,900 barrier. Having closed above that level on Monday.
Gold bulls, on the other hand, encountered resistance just below the February 3 high of $1,919. Prompting a decline. To restart the uptrend towards the year-to-date highs of $1,960. A daily close above the latter is required.
The $2,000 mark is considered as the next destination for gold purchasers. The 14-day Relative Strength Index (RSI) has declined but remains far over the midpoint, keeping bulls optimistic.
On the other hand, a further retreat in the Gold price might put the $1,900 round figure to the test. If the decline gains traction. Gold sellers will extend their dominance towards the slightly positive 50-Daily Moving Average (DMA) around $1,874.
Prior to it, the February 9 high of $1,890 was reached. may come to the aid of gold purchasers.
