Gold prices struggled on Monday as the yellow metal remained in a trading range established over the past week as traders looked for more clues from upcoming US inflation data.
The lack of direct signals last week also provided some clues for gold, with traders now looking to the upcoming Consumer Price Index (CPI) as the next big signal.
CPI data is now the main driver of precious metals. Gold is expected to appear shortly ahead of US CPI data. While the reading should show that inflation continued to ease in January, price pressures remain well above the Fed’s annual target of 2%, giving the central bank more incentive to keep interest rates higher for longer.
In addition to the inflation data, several Fed officials are in the news this week, including Neel Kashkari, Mary Daly and Ralph Bostic.
Fed officials are expected to repeat recent comments that the central bank is in no rush to cut interest rates. That perception led to sharp losses in gold in early February, as higher interest rates increase the opportunity cost of investing in the yellow metal.
The dollar also remained visible at its three-month high, keeping gold prices under pressure.
Technical Outlook – Gold:
Since the beginning of the month, the price of gold has turned negative and has fallen more than 0.35%. Prices continued to decline from a high of 63,230 on February 1, 2024 and hit a low of 61,926.00 yesterday.
In the above chart, prices are trading below a symmetrical triangle. Which suggests that a bilateral break of 2%-3% lets move. On the downside, crucial support is seen at 61480 and a break below is expected to fall to 60800-60550.
Otherwise, prices may take support between 61550-61500 and retest 62500-63000 in the near future.
There is major upside resistance at 63350, prices may jump 63500-64050.00
Commodity Samachar
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