Be careful!Gold shorts may take advantage of US CPI inflation to lower gold prices to regain blood
XAU/USDFundamental background
In the high-profile US later todayCPI (See economic calendar below)Gold was higher this morning ahead of the announcement.and11Expectations for core inflation (the Fed’s preferred measure) and headline inflation were lower than previously reported11It was down from the previous month’s figures, which many were hoping would translate toCPI. Fed speakers will also be speaking around the inflation report and it will be interesting to see if they change their recent hawkish rhetoric in light of the actual data.
🔥No matter which asset you trade, the US dollar and Fed policy will cause shocks in the entire market. Want to know if the dollar and U.S. bonds can rise? In addition to the Fed raising interest rates, what other factors affect the trend of the US dollar? How do the bigwigs view the technical outlook of the US dollar?These are all answered in the free latest USD outlook below!👍
economic calendar
source:DailyFX Economic Calendar
Falling inflation has implications for the Fed and its rate hike cycle. Judging by the Fed funds futures below, current market pricing shows that,2Monthly meeting expected for rate hike31.24basis points, but softer inflation data could underpin rate hike25basis point expectations, and lower the opportunity cost of holding gold, relative to rate hikes50basis points——Therefore, falling inflation will support gold prices(bad for dollar),vice versa.
Fed Rate Probability
source:Refinitiv
technical analysis
Gold Price Daily Chart
chart byIGofWarren Venketasprepared by
The daily chart for spot gold shows that price action is trending higher, testing1880.00psychological level, the psychological level since2022year6It has been acting as a resistance level for months.Lower inflation could see gold move towards1900.00Pass attack, and higher inflation rate may push gold prices all the way down to1860.00or even lower.Markets may have reacted too optimistically to the drop in wages data in last week’s nonfarm payrolls report, ifCPIWith a disappointing upside, the market could be feeling the pinch.
RSIindex (relative strength index)continue to appear bearish/top divergence, which indicates that the trend of the oscillator is in line withXAU/USDThe price is the opposite. Typically, this phenomenon signals an imminent downtrend and may be catalyzed by rising inflation data.
🔔Is this the end of the gold rally? What are the technical minefields of the gold price that need to be avoided?Now you may wish to follow the DailyFX global analyst team to learn the latest gold outlook for free, refer to how the big guys set the gold price target and stop loss, and expand your trading profit probability! 👍
Resistance level:
•1919.90
• 1909.80
•1900.00
Support position:
• 1880.00
• 1850.00
IGClient Sentiment: Bullish
IGCSIt shows that retail traders are currently clearly bullish on gold,59%of retail traders are currently holding long positions(as of this writing).existDailyFXwe typically take a contrarian view on retail trader sentiment, however, due to recent shifts in long and short positioning, we draw a short-term upside bias.
(Written by Warren Venketas, translated by Eunice)
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