The price of gold(XAUUSD) has risen to $1,850.
The gold(XAUUSD) market is trying a sluggish return early Thursday, after hitting a six-week low of $1,831 on Wednesday. The United States Dollar (USD) pullback from nearly one-month highs is bringing some relief to gold bulls.
US Dollar rose as a result of strong retail sales data in the United States and hawkish Federal Reserve wagers.
Following the release of the all-important United States Consumer Price Index (CPI) data on Tuesday, gold prices have resumed their decline below $1,850 in Wednesday’s trading. For new trade instructions, investors are looking forward to US Retail Sales data and US Federal Reserve speech.
After the top-tier Retail Sales data from the United States came in much stronger than the market estimate on Wednesday, the US Dollar regained lost ground and rose aggressively in sync with US Treasury bond rates. Consumer spending in the United States, as measured by retail sales increased by 3.0% MoM in January, compared to 1.8% expected and -1.1% before, while Core Retail Sales up by 2.3%, compared to 0.8% expected and -0.9% previously. Strengthening consumer demand, together with sizzling US Consumer Price Index (CPI) and stunning Nonfarm Payrolls (NFP) figures, indicated to a sturdy American economy, bolstering US Federal Reserve rate rise forecasts (Fed).
As a result, US Treasury rates received a fresh bid throughout the curve, propelling the US Dollar alongside and putting pressure on the USD-denominated gold price. The recent hawkish comments from Federal Reserve policymakers also indicates that additional tightening is on the way, increasing the pain in the non-interest-bearing gold price.
Gold(XAUUSD) Technical Analysis
The gold price broke through the falling trendline support around $1,838 and continued to fall to test the $1,830 round number.
At the time of writing, gold bulls had reclaimed the falling trendline support-turned-resistance, which was currently at $1,836.
For the recovery to gain traction, the gold price must maintain a sustained break above the psychological barrier of $1,850. The key 50-Daily Moving Average (DMA) of $1,861 is considered as the next upward objective for gold buyers.
The 14-day Relative Strength Index (RSI) is rising but remains below the 50.00 threshold, indicating that the gold price has significant downside potential.
Gold bulls are keeping an eye on the horizontal trendline support from the January 5 low of $1,825.
sellers regain control, the trendline support at $1,836 and the $1,830 demand region will be retested.
