Gold retreated from record highs on Tuesday as the dollar and Treasury yields rose after the US reported a faster-than-expected rise in inflation in February, raising doubts that the Federal Reserve will cut interest rates as early as June.
MCX near month gold future settle at 65481, down 0.84% following seven-straight days of fresh record highs.
The US consumer price index rose 3.2% in February from a year ago, up from 3.1% at the beginning of the month and ahead of the consensus estimate of 3.1% growth. Core inflation, which excludes food and energy, rose to 3.8% from 3.9% in January, but beat expectations for a 3.7% increase.
The overall report showed that US inflation remained within the Fed’s 2 percent target, although some indicators indicated that investors were expecting moderate inflation. the bank will start cutting rates as early as June.
Furthermore, the dollar strengthened and Treasury yields rose as the two-year US Treasury yield last rose 4.0 basis points to 4.601%, while the 10-year note was at 4.164%, up 6.2 basis points, adding pressure on priests.
Technical Outlook
Gold retreated from an intraday high of 66,044 and fell to 65,382 before settling 0.84% at 65,481 compared to previous day’s close. Prices halted the uptrend of March 8 and continued to trade below the lifetime high of 66,356.00.
On the top chart, evening doji star candlestick formation creates the probability of a trend reversal. And prices hope to provide a temporary correction. Prices have yet to break below 65,380 to test the next support at 65100-64850.
Alternatively, prices may consolidate in between the range of 65400-66050.00 in days to come. On the higher side, strong resistance remains at 66050 and above, prices may retest 66300 and 66550.
Commodity Samachar
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