fundamental News - XAUUSD

Gold price is in on the move to test the $1900 mark in Friday’s Asian trading, as the bulls take a breather before the next leg higher. Expectations that the Fed will maintain its accommodative monetary policy stance, even though the US inflation ran hotter than the forecasts, keeps the bullish undertone intact around gold price. Treasury yields dropped alongside the US dollar in the aftermath of the CPI report, as the Fed is still likely to consider the price rise as transitory.


Data for the US Michigan Preliminary Consumer Sentiment data slated for release on Friday, although the main focus remains on next week’s FOMC meeting.

However, instead, gold collected a bid as the US dollar sank in a market priced for a dovish Federal Open Market Committee next week.

The DXY had been building on its modest gains ahead of theUS CPI data, edging higher for a third straight day the highest level since Monday to 90.31. However, the index drifted lower into what was a relatively disappointing reaction to the data considering the anticipation leading into the event and a strong outcome.

FOMC will be important for gold, the upside US CPI print may trigger calls to challenge the Fed on taper and rate hike pricing. However, the Fed is in no hurry to exit, at least according to the bond market and gold's performance today.

A surge in the greenback would equate to a pullback in gold which is increasingly vulnerable as speculative flows are now slowing alongside physical flows.

Technical analysis

XAUUSD, a break above the $1,900 level would be just as significant as a break below the $1,870 support.

Target above $1,900 will target trendline resistance at $1,920.00 which will signal more bullish sentiment.

Below the trendline support of $1,870 the daily 200-SMA will decide if Gold bull will continue.

expectation today: bullish




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