Gold Price outlook: Yellow Metal Hurdle $1,888, Keep US Inflation Eyed

Bullion Price outlook: Gold price (Yellow Metal) clings to mild gains around $1,888 as expectations for softer US inflation underpin cautious optimism during early Thursday. As a result, the US Dollar keeps the recent bearish bias while tracking downbeat US Treasury yields.

  • Resistance-turned-support from mid-November, upbeat China CPI put a floor under yellow metal price.
  • Downbeat market consensus for US CPI, Fed’s hesitance keeps Gold buyers hopeful.
  • Gold price remain firmer around the highest levels since May 2022.
  • Bulls might wait for a sustained move beyond the $24.20 mark before positioning for further gains.
  • Silver attracts fresh buying in the vicinity of support marked by the 200-SMA on the 4-hour chart.
  • The recent two-way price moves warrant some caution before placing aggressive directional bets.

That said, the US 10-year Treasury yields dropped two basis points (bps) to 3.53% while the US two-year bond coupons also traced the 10-year counterpart and print mild losses at around 4.21% at the latest.

Not only the downbeat yields but mildly bid US stock futures and dovish comments from Federal Reserve Bank of Boston President Susan Collins also weigh on the US Dollar. With this, the US Dollar Index (DXY) prints mild losses around 103.10 as bears poke the lowest levels marked since early June, tested earlier in the last week.

Furthermore, the risk-positive headlines from China’s National Development and Reform Commission (NDRC) and China’s firmer Consumer Price Index (CPI) for December add strength to the Gold buying.

It’s worth observing that market forecasts of softer US CPI data for December, expected 6.5% YoY versus 7.1% prior, also favor the gold buyers. That said, the Core CPI, namely the CPI ex Food & Energy, will be observed closely for clear directions and is expected to be 5.7% versus 6.0% prior.

Gold Price Technical Analysis & Report

Gold price ignores the previous bearish Doji candlestick to remain firmer above the resistance line from mid-November, around $1,868 by the press time.

The yellow metal also pays little to the overbought RSI conditions, which in turn suggests that the gold buyers are running out of steam. Additionally, an area comprising lows marked during March 2022 around $1,897 and the $1,907 threshold also stands tall to challenge the Gold’s upside momentum.

As a result, the quote’s north-run appears limited unless it crosses the $1,907 threshold, a break of which could quickly propel it towards a late March 2022 swing high near $1,968 before highlighting the $2,000 psychological magnet for the gold bulls.

Alternatively, a downside break of the $1,860 support line, the previous resistance, could quickly drag the metal toward the one-month-old horizontal support near $1,820.

Following that, the 50-DMA and the 200-DMA could challenge the Gold sellers around $1,787 and $1,777 in that order.

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