Bulls maintain control of gold in volatile trading session
- The consumer price index in the US rose in December by 6.5% year on year.
- US Federal Reserve Patrick Harker said it was time to move to the 25 basis point step.
- Positive momentum in gold (XAU/USD) should extend towards the $1920 area.
Spot gold jumped to $1,901.70 a troy ounce after the release of the US consumer price index (CPI) and comments from Philadelphia Federal Reserve Bank President Patrick Harker, who later returned from that level, but maintained intraday dynamics. profit.
The US CPI rose 6.5% year-on-year in December, as expected, while underlying price pressure rose 5.7%, in line with market forecasts. On a monthly basis, inflation fell by 0.1%, while the core index lived up to expectations, rising by 0.3%. The US dollar fluctuated between strong gains and falls, reacting immediately to the headlines as market participants were undecided.
The Fed’s Harker’s comments, however, ultimately tipped the balance as he said the worst effects of inflation were behind him, adding that “it’s time to move on to a 25 basis point increase in the base.” The US dollar fell on Forex and stocks rose on the stock exchange, although volatility persisted in the US session as well. Gold is currently trading at around $1,891 per troy ounce.
Short-term gold technical forecast
The daily gold price chart in US dollars (XAU/USD) shows that it is holding above the previous weekly high at $1886.63, which is an immediate support level.
The Momentum indicator has resumed gains at positive levels, but remains below its weekly high, while the Relative Strength Index (RSI) is rising, currently approaching the 70 mark.
At the same time, the 20x simple moving average (SMA) is accelerating significantly to the north. above the longest all below the current level, suggesting continued buying pressure.
In the short term, judging by the 4-hour chart, we can talk about the continuation of the bullish mood. The solidly bullish SMA-20 moving average continues to lead providing intraday support, currently at 1878.10. The longer moving averages are also moving up, but well below the shorter ones. Finally, technical indicators resumed moving at positive levels, completing the consolidation phase of the last few days.
Support levels: 1878.10 1867.05 1856.90
Resistance levels: 1901.70 1914.20 1926.00
Valeria Bednarik, FXStreet
Valeria Bednarik has extensive experience writing technical and fundamental analysis, with a particular focus on currencies and commodities. His short but precise articles cover various aspects of the market with a didactic approach adapted to the level of knowledge of any reader. She graduated from the Catholic University of El Salvador, Argentina with a Chartered Accountancy in Taxation and Cost Management.
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