Gold price (XAU/USD) struggles to find a direction as investors await the US Consumer Price Index (CPI) data for August. The precious metal remains sideways despite the US Dollar delivering a corrective move, while investors digest global slowdown fears.
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Looking for a sweep of the 30M liquidity zone from Tokyo Session as well as the 5M FVG to be tapped and respected before breaking structure to the downside. 3:1 RR🚀 pic.twitter.com/vtRbEb1osN
— harry (@harryjpurser) September 11, 2023
Despite breaching the midline last Friday, the 14-day Relative Strength Index (RSI) is edging upward but is still just below it.
Therefore, risks appears titled to the downside for Gold price. But Gold sellers need to crack the 21 DMA support at $1,916 on a daily closing basis.
A sustained drop below that level will challenge the $1,900 threshold, below which a sell-off toward $1,885 will be inevitable.
— Forex (@Forex8851063059) September 11, 2023
On the flip side, the immediate resistance is seen at the 50 DMA of $1,932, above which the 100 DMA hurdle at $1,950 will be put to test.
The next targets for gold buyers will be the static barrier of $1,970 and the high of $1,982 on July 27.
Investors are trading cautiously as the crucial US Consumer Price Index (CPI) inflation week begins, following the lead of last Friday’s marginally flat Wall Street close. A poor performance from Tesla Inc. and Nvidia Corp. negated Apple Inc.’s resurgence, making for a slow week’s finale.
— Akhbarpoint (@akhbarpoint) September 11, 2023
Following the unexpectedly hawkish comments made over the weekend by Bank of Japan (BoJ) Governor Kazuo Ueda, risk sentiment in Monday’s trade has remained muted. The safe-haven US Dollar, however, falls victim to a significant sell-off in the USD/JPY pair, failing to lift a cautious market attitude. Ueda stated over the weekend that the Japanese Yen will experience a significant increase going forward as the central bank concentrates on “a quiet exit” from its ultra-loose monetary policy.
Further, the US Dollar also ignored rallying US Treasury bond yields on optimism surrounding a soft landing for the United States economy. While returning from the G20 Summit on Sunday, US Treasury Secretary Janet Yellen that she is feeling “increasingly confident about a soft landing for the US economy.”
US Treasury seems to disagree. pic.twitter.com/Fibh2vzcF6
— Abnormal Accrual (@bbm010) September 11, 2023
Thus, a general US Dollar decrease early on Monday is helping the price of gold rise from over one-week lows of $1,915. However, despite an increase in US Treasury bond yields, further gains in the gold price seem elusive. Additionally, gold purchasers may want to proceed cautiously due to China’s decreasing CPI and deflation at the factory gate. According to data released on Saturday by the National Bureau of Statistics (NBS), China’s CPI increased 0.1% in August compared to a year earlier, reversing course somewhat from a decrease of 0.3% in July.