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Gold (XAU/USD) Technical Forecast: Bullion juggles between inflation and rate hikes

Gold (XAU/USD) Technical Outlook: Neutral

  • Gold prices threaten key technical levels below $1,850
  • USD lack direction after US CPI exceeds expectations
  • Increased risk appetite allows Gold to remain resilient against riskier assets

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Gold prices have recently remained under pressure as inflationary pressures and the probability of higher rates weigh on risk sentiment.

After a four-decade high inflationary print, Gold and other safe-haven assets retraced a portion of their recent gains as investors strive to find balance in a risk-orientated environment.

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Gold (XAU/USD) Technical Analysis

After two consecutive weeks of gains, Gold prices have bulls ran into a wall of resistance above the 38.2% Fibonacci retracement level of the 2020 – 2021 move at $1,8930.

As buyers and sellers battle it out, the development of a potential spinning top candle on the weekly time-frame is indicative of indecision as prices track the 10-period moving average (MA).

Gold (XAU/USD) Weekly Chart

gold chart

Chart prepared by Tammy Da Costa using TradingView

Gold (XAU/USD) Daily Chart

gold chart

Chart prepared by Tammy Da Costa using TradingView

For now, a break above $1,860 gives way for the $1,876 mark (50% retracement of the above-mentioned move) and towards the $1,900 mark.

— Written by Tammy Da Costa, Analyst for DailyFX.com

Contact and follow Tammy on Twitter: @Tams707