XAU/USD | New perspective | follow-up details

Amidst the revision of the Consumer Price Index (CPI) numbers to accommodate new seasonal adjustment factors, the XAU/USD faced bearish pressure, culminating in a 0.50% dip, closing the week around the $2,025 area. This development has heightened focus on the upcoming Consumer Price Index (CPI) figures from January, as market participants seek insights for potential Federal Reserve (Fed) decisions.

Market participants are closely monitoring the Fed's actions, particularly as the soft CPI revisions appear to have provided some respite for officials contemplating rate adjustments. However, the strong Q1 growth predictions in the US market and escalating wage pressures within a tight job market suggest potential delays in rate cuts. Currently, the market sentiment indicates a shift from anticipating a cut in March to potentially expecting one in May. The forthcoming inflation reading will play a pivotal role in determining the timing of the easing cycle. Should the data support a delay in rate cuts, it could lead to further downside for the price of Gold.

In this video, we delve into the current market conditions from a technical standpoint, providing insights into understanding and interpreting these developments.

XAUUSD Technical Overview:
In this video, we conducted a comprehensive analysis of the XAUUSD chart, utilizing both technical and fundamental perspectives. Our examination included an in-depth study of key levels, historical price movements, market behaviors, and the interplay between buyers and sellers, aiming to unveil potential trading opportunities.

Our focal point for the week is the $2,025 zone, characterized by historical significance, rendering it a pivotal level. The sustainability of bullish momentum above this zone could pave the way for continued buying pressure, potentially propelling prices to new highs. Conversely, a breach below the $2,025 level, coupled with persistent selling pressure, might signal a resurgence of bearish sentiment.

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Comment:

The gold price continues to trade within a narrow range, hovering around the key level - $2,025 {as highlighted in the video} during the Asian session. The prevailing sentiment suggests that the Federal Reserve (Fed) is likely to maintain higher interest rates for an extended period due to the resilient nature of the US economy. This stance has been bolstering US Treasury bond yields, while the overall positive sentiment in the equity markets is also seen as a factor restraining the upward movement of gold prices.

Simultaneously, the uncertainty surrounding the timing of potential interest rate adjustments by the Fed may impede the rise of the US Dollar, thereby providing some support to gold prices. Market participants, currently cautious, are refraining from making aggressive moves and are awaiting the release of the upcoming US consumer inflation figures, scheduled for Tuesday, to gain insights into the Fed's future policy decisions. Given this backdrop, we will maintain a prudent approach, using the newly identified structure on the 1-hour timeframe as a reference point to guide today's trading activities.

Good Morning

Trade active:

UPDATE

Protect sell positions

Trade closed manually:

The sell position initiated during yesterday's trading session has been closed, as Gold prices saw increased buying activity during the Asian session. The anticipation of potential inflationary pressures in the United States has led to expectations that the Federal Reserve will refrain from implementing interest rate cuts at the upcoming March meeting. This sentiment could reduce the appeal of safe-haven assets, thereby potentially limiting the current bullish momentum. As such, it is crucial to await significant confirmation before considering entry into this upward movement.

Lorie K. Logan recently emphasized that there is currently no immediate necessity to lower interest rates, citing "significant progress" in managing inflation. However, she also highlighted the importance of gathering further evidence to ensure the sustainability of this progress.

Given these developments, Gold prices may encounter continued downward pressure as the US Dollar experiences renewed demand ahead of today's US inflation data hence the structures identified on the chart remain our guiding light.🚦

Good Morning

Comment:

Since the bullish momentum is getting stronger; while we still keep the bearish option open, we shall position ourselves above the resistance level of the range at 2,027 for buying opportunities.

Trade active:

#XAUUSD

UPDATE

Trade active:

All three sell-stop orders have been triggered, currently yielding over 700 pips in profit, propelled by the resurgence of inflationary pressures in the US economy. The latest CPI data indicates a notable acceleration in inflation growth. It is prudent to secure all sell positions, and I will provide updated levels after closely monitoring price action for the next hour.

Trade active:

At this point, it's advisable to lock in gains from all sell positions taken yesterday as the price of Gold continues its sideways consolidation during the Asian session. Despite the post-US CPI losses, Gold remains susceptible. The unexpectedly strong US consumer inflation report released yesterday has sparked speculation that the Federal Reserve will delay interest rate cuts until the June policy meeting. This supports higher US Treasury bond yields and undermines any sustained upward movement.

Nevertheless, the recent shift in risk sentiment, evidenced by a sharp decline in global equity markets, may aid the safe-haven asset in temporarily gaining upward momentum, potentially marking a retracement of yesterday's bearish trend.

Given this fundamental backdrop, the prevailing path of least resistance for XAU/USD appears to be on the downside. As a result, we will rely on chart structures to guide our approach to any market opportunities that arise.

Good Morning

Trade active:

#XAUUSD

UPDATE

Trade active:

All sell positions have been closed, yielding over 700 pips, as the price of Gold continues its sideways trading pattern, remaining within a defined range over the past few days. The increasing consensus that the Federal Reserve (Fed) will maintain higher interest rates for an extended period, reinforced by the unexpectedly high US inflation data released on Tuesday, continues to act as a barrier for the safe-haven asset.

Meanwhile, the US dollar appears to lack strong bullish conviction due to the ongoing decline in US Treasury bond yields. This, coupled with apprehensions regarding geopolitical risks arising from conflicts in the Middle East, provides some support to the safe-haven Gold price. As a result, exercising caution before initiating new bearish positions is warranted. Looking ahead, market participants are turning their attention to the US economic calendar for potential mid-tier economic indicators that could provide fresh momentum. In light of this, we will exercise patience and rely on the current structure observed on the 1-hour timeframe to guide our trading activities for today.

Good Morning

Trade active:

#XAUUSD

UPDATE

It is time to protect the buy position as we look out for new trading opportunities.

Trade active:

Technically, the current bullish trend seems to be holding strong with price action maintaining levels above the ascending trendline. However, the potential for further upward movement in the XAU/USD price is uncertain due to the US Dollar's recent recovery alongside a slight uptick in US Treasury bond yields and a cautiously optimistic market sentiment. It is advisable to safeguard all buy positions at this stage. During the Asian trading session, Gold prices (XAU/USD) continued to consolidate as market participants may be waiting for more clarity on the Federal Reserve's stance on interest rate cuts. Following a disappointing US Retail Sales report, there are speculations that the Fed might consider rate cuts soon. Nevertheless, robust US consumer inflation data and hawkish comments from Atlanta Fed President Raphael Bostic suggest that the Fed could delay any policy changes until the June meeting. Despite this mixed reaction, concerns over rising tensions in the Middle East could provide some support for XAU/USD. At this juncture, market participants will be closely watching today's US economic data release for potential market-moving developments. It is important to secure existing long positions while remaining vigilant for new trading opportunities.

Good Morning.

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#XAUUSD

UPDATE