The Price of Gold Is Encountering Resistance Following The US CPI 6.4% Release

Key Take-Aways

  • The $1,865 resistance area proved difficult for the gold price to overcome.
  • On the 4-hours chart, a crucial negative trend line is developing with resistance close to $1,862.
  • After the US CPI release, the EUR/USD and GBP/USD exchange rates jumped lower before reversing.
  • In January 2023 (YoY), the US Consumer Price Index rose 6.4% rather than 6.5%.

Price Technical Analysis of Gold

The gold price battled against the US dollar to begin a comeback wave above $1,870. The bulls made a few efforts to clear $1,865 and $1,870, but they were unsuccessful.

The XAU/USD 4-hours chart shows that the price dropped significantly following the announcement of the US CPI data. According to the US Bureau of Labor Statistics, the US CPI fell from 6.5% in December to 6.4% in January on an annual basis.

Below the support levels of $1,865 and $1,860, there was a sharp fall. Price spikes even occurred below $1,850. The bulls, though, were active close to the $1,842 area.

Price rose above $1,850 after a brief decline. It is still seeing significant opposition close to $1,865. On the same chart, a significant negative trend line with resistance close to $1,862 is also developing.

The price may move toward the 200 simple moving average if it breaks through the $1,870 zone and the 100 simple moving average (red, 4-hours).

An early support for the downside is located close to the $1,850 mark. The gold price may struggle to hold above the $1,835 region below the next significant support, which is close to the $1,842 level. The price of gold could decline toward the $1,820 support under the scenario mentioned.

When examining EUR/USD, the pair likewise experienced a drop below the 1.0750 mark before rising again. Near 1.0800, it is still having difficulties.

Economic News To Trade Today

  • Forecast for US retail sales in January 2023 (MoM) is -0.2%, down from the previous +0.6%.
  • Forecast for the UK Consumer Price Index for January 2023 (YoY) is down +10.3% from the prior +10.5%.
Amogo Solomon is a Broker-Dealer/Market Research analyst and writer in ACT Brokers with a background in Computer Science, Data Analytics, and Forex Broker Dealing. He specializes in Forex Dealing, markets Analysis, Currency research, forex fundamental and technical analysis, and Monitoring of Forex trends, Stocks, Equities, Cryptos, and Commodities. He possesses strong technical and analytical skills and is well known for his entertaining and informative analysis of the global economy, fiat currency, commodities, Stocks, Indexes, Futures, and Options markets. He held a Bachelor's degree in Computer Science and Nanodegree in Programming for Data Science Enterprise.