During the Asian session, the price of gold is on the rise as the US dollar loses some momentum after a strong rise at the start of the week. On the other hand, XAU/USD remained close to a four-week low which was printed overnight. The price rose 0.11% to $1,900.21. GOLD rose from a low of $1,897.42 to a high of $1,903.83.
The pessimism of the price of gold is accompanied by galloping inflation in the American economy. For example, the US consumer price index (CPI) has hit multi-decade highs, and the Federal Reserve’s second stimulus package for the tight labor market has already included an interest rate hike ( Fed) by 50 basis points (bps).
According to testimony from Fed Chairman Jerome Powell at the International Monetary Fund (IMF) meeting, a huge rate hike is on the horizon as investors continue to focus on the state of the economy. balance sheet reduction. Extracting liquidity from the economy at a faster rate is the need of the hour, and Fed policymakers are likely to use all the tools at their disposal.
In the coming weeks, the precious metal will most likely dance to the beat of U.S. consumer confidence and durable goods orders releases, both of which are due out on Tuesday. The preliminary reading for durable goods orders for the month is 1%, compared to the previous version of -2.1%.
Gold Technical Outlook
Gold price fell sharply yesterday to reach our target target of 1890.00, with a slight bullish bias influenced by stochastic positivity, and may test key resistance at 1925.35 before resuming its decline, with a break of 1890.00, extending the wave down to 1850.00 in the short term. As a result, we expect the main dominance of the downside bias to continue unless price recovers to break through and hold above 1925.35.
Today’s trading range should be between 1875.00 support and 1915.00 resistance. The trend expected today is bearish. Good luck!