Gold maintains its above $1,700 level while US rates are calm.

VOT Research Report

Market Analytics and Considerations

On Thursday, the price of gold remains sideways and is just above $1,700. Prior to the release of US CPI data, the benchmark 10-year US Treasury bond yield remains stable at 4.1%, making it challenging for XAUUSD to make a clear move in either way.

The gold price is currently up against a wall of strong resistance levels at roughly $1,710, according to the Technical Convergence Detector. The Fibonacci 38.2% one-day and the SMA10 four-hour coincide at that level.

The previous high four-hour at $1,713 is the next upside target, and if it is reached, a challenge of the $1,715 level, where the Fibonacci 61.8% one-day and SMA100 one-day meet, cannot be counted out.

In contrast, a persistent break below the Fibonacci 23.6% one-day support level at $1,706 will rekindle the selling momentum in the direction of the prior low four-hour support level at $1,704.

The pivot point one-month R1 and one-week R1 are converging at $1,703, which is the last line of defense for the price of gold.

As bulls become more cautious ahead of the crucial Consumer Price Index (CPI) from the United States, gold price is making modest increases above the $1,700 level. The US inflation data is crucial in predicting the likelihood of a rate hike by the US Federal Reserve.

Expectations of a 50 bps Fed rate hike in December are anticipated to rise in response to a weaker US core CPI reading. While the yearly inflation rate is projected to ease to 8.0%, the monthly US CPI is projected to increase to 0.6%. The Core CPIs are anticipated to decline over the long term, indicating that inflation has peaked. On a weaker US CPI-induced fresh US Dollar weakness and a risk rally, the price of gold may restart its upward trajectory. Markets are currently pricing a 57% chance of a 50 basis point Fed rate increase in December.

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