Gold Forecast: It's all about the inflation report today.
Gold's Fundamental View: Gold has been rising in a row for seven days. Currently, the gold price is hovering nearly $1830/1835 price zone ahead of the inflation report.
Today's inflation is significant, and investors are cautious ahead of the critical data today. Based on today's inflation report, FED will clarify how many times and how much they will hike their rates.
If inflation rises more than expected and forecasted, FED will be more aggressive and will hike rates very often. It will be bad for the gold price, and gold can drop nearly the $1800 price zone.
On the other hand, if CPI (inflation) reports print negative than forecast today, FED won't hike their rates 50BP. Moreover, they can hike the 25BS rate. 25BP rate already priced in. So, it will benefit the gold p[rice and gold may initially test 1845/1850 price zone.
Gold's current sentiment: Gold's current sentiment is positive. We have seen even positive NFP, and overall the U.S labor market report couldn't get down the gold price. BOE's rate hike also didn't hurt gold.
We know from our experience any major bank's favorable rates hurt gold and bitcoin prices. But this economic theory didn't happen with gold and bitcoin prices this time.
These are happening because of covid and higher inflation that causes economic growth slowdown and political crises worldwide. Yemeni Houthi is threatening UAE, and on the other hand, Russia has a chance to attack Ukraine.
Gold is a haven asset and works best against inflation. As a result, investors don't like to take risks to bet on other assets.
XAUUSD Technical View: Technically, gold has been stuck in a triangle for a long time. Gold dropped from trendline resistance to its trendline support four times. Gold's triangle is getting narrow. So very soon, we will see a clear breakout.
From the present price zone, immediate resistance is $1837, and trendline resistance is $1847/1850. So, technically gold has some more room to go up.
But as long as gold cannot break above its trendline resistance, it can't carry its uptrend for the long term. And today's inflation is one of the most significant catalysts to break out trendline resistance if CPI reports drop hard.
1855/1860 is a no trading zone. Anything can happen between 1855/1860. If gold price can break and stabilize above $1860 price, it will confirm break out trendline resistance and triangle.
So, Breaking and stabilizing above $1860, we will go for a long-term buy. The first target to the upside is $1975. We may see a minor correction from the $1975 to nearly $1845/1850 price zone. At $1845/50 we may buy again till $1900/1915 price zone.
On the other hand, if inflation rise today, gold may initially drop to the $1820 price zone. Breaking below $1820 will open the door for more drops till the $1802/1795 price zone.
Today's inflation is significant, and investors are cautious ahead of the critical data today. Based on today's inflation report, FED will clarify how many times and how much they will hike their rates.
If inflation rises more than expected and forecasted, FED will be more aggressive and will hike rates very often. It will be bad for the gold price, and gold can drop nearly the $1800 price zone.
On the other hand, if CPI (inflation) reports print negative than forecast today, FED won't hike their rates 50BP. Moreover, they can hike the 25BS rate. 25BP rate already priced in. So, it will benefit the gold p[rice and gold may initially test 1845/1850 price zone.
Gold's current sentiment: Gold's current sentiment is positive. We have seen even positive NFP, and overall the U.S labor market report couldn't get down the gold price. BOE's rate hike also didn't hurt gold.
We know from our experience any major bank's favorable rates hurt gold and bitcoin prices. But this economic theory didn't happen with gold and bitcoin prices this time.
These are happening because of covid and higher inflation that causes economic growth slowdown and political crises worldwide. Yemeni Houthi is threatening UAE, and on the other hand, Russia has a chance to attack Ukraine.
Gold is a haven asset and works best against inflation. As a result, investors don't like to take risks to bet on other assets.
XAUUSD Technical View: Technically, gold has been stuck in a triangle for a long time. Gold dropped from trendline resistance to its trendline support four times. Gold's triangle is getting narrow. So very soon, we will see a clear breakout.
From the present price zone, immediate resistance is $1837, and trendline resistance is $1847/1850. So, technically gold has some more room to go up.
But as long as gold cannot break above its trendline resistance, it can't carry its uptrend for the long term. And today's inflation is one of the most significant catalysts to break out trendline resistance if CPI reports drop hard.
1855/1860 is a no trading zone. Anything can happen between 1855/1860. If gold price can break and stabilize above $1860 price, it will confirm break out trendline resistance and triangle.
So, Breaking and stabilizing above $1860, we will go for a long-term buy. The first target to the upside is $1975. We may see a minor correction from the $1975 to nearly $1845/1850 price zone. At $1845/50 we may buy again till $1900/1915 price zone.
On the other hand, if inflation rise today, gold may initially drop to the $1820 price zone. Breaking below $1820 will open the door for more drops till the $1802/1795 price zone.
Comment:
We have updated our gold chart and analysis. Lets check it out here.
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So, Breaking and stabilizing above $1860, we will go for a long-term buy. The first target to the upside is $1875. We may see a minor correction from the $1975 to nearly $1845/1850 price zone. At $1845/50 we may buy again till $1900/1915 price zone.