Prior to the release of the US Consumer Price Index (CPI) data at 12:30 GMT, the gold price (XAU/USD) has moved its auction over the key barrier of $1,960.00. Since investors are eagerly expecting the US inflation data to draw conclusions about the Federal Reserve's (Fed) interest rate policy, the precious metal is predicted to exhibit erratic movements.
The prospects of the Fed making a neutral interest rate decision are very strong, therefore S&P500 futures are maintaining gains from the Asian session. Market mood is generally positive, and risk-sensitive assets are more appealing.
Near its two-week low of around 103.20, the US Dollar Index (DXY) is showing signs of vulnerability as market investors anticipate that the energy component will continue to exert significant pressure on US inflation.
The energy component may have had a negative effect on the headline index, according to analysts at NBF, as prices for both gasoline and natural gas likely decreased. With regard to shelter, anticipated gains could still lead to a 0.2% monthly rise in prices. The yearly rate should decrease from 4.9% to a two-year low of 4.1% if we are correct. The core index, on the other hand, might have increased by 0.3% on a monthly basis, which would equal a 5.1% yearly rise.
US Treasury yields are showing signs of pressure due to the likelihood of a neutral Fed policy increasing. The yield on US Treasury bonds with a 10-year maturity has decreased to just under 3.72%.
technical examination of gold
Investors should be ready for the gold price to behave in a highly erratic manner prior to the release of the US inflation report. On a two-hour timeframe, the gold price has been creating a symmetrical triangle chart pattern; when important US economic data collide with a volatile contraction pattern, an explosion will result, which will be followed by wider ticks and high volume.
The 50-period Exponential Moving Average (EMA) at $1,964.48 exhibits non-directional changes in the price of gold.
Additionally, the Relative Strength Index (RSI) (14) is fluctuating between 40.00 and 60.00, indicating that investors are awaiting important data.