Gold prices remained near a three-week low as the dollar remained strong and investors await U.S. inflation data to gauge the Federal Reserve's stance on interest rates. The decline in gold prices last week was attributed to Fed Chair Jerome Powell's hawkish remarks while the upcoming U.S. consumer prices index (CPI) data is expected to play a role in determining the Fed's decision at their next meeting. The dollar's strength made gold less attractive to other currency holders and the macroeconomic backdrop is supportive of gold, with the U.S. monetary tightening cycle seemingly near its end and the dollar peaking.
From the technical point of view gold price is currently testing a major technical support level which consists of the 38.2% of the daily Fibonacci retracement level, the lower band of the Bollinger bands and also is just above the area where the 50 and the 100 day moving averages touch. All of these aspects make the price area of $1,930 very strong support to the price and is also the psychological support of the round number. In addition the Stochastic oscillator is recording extreme oversold levels so the majority of the technical indicators point to a correction to the upside in the near short term outlook. If this proves to be accurate then the first area of possible resistance might be found around the $1,960 level which consists of the psychological resistance of the round number as well as the 23.6% of the daily Fibonacci retracement level.
From the technical point of view gold price is currently testing a major technical support level which consists of the 38.2% of the daily Fibonacci retracement level, the lower band of the Bollinger bands and also is just above the area where the 50 and the 100 day moving averages touch. All of these aspects make the price area of $1,930 very strong support to the price and is also the psychological support of the round number. In addition the Stochastic oscillator is recording extreme oversold levels so the majority of the technical indicators point to a correction to the upside in the near short term outlook. If this proves to be accurate then the first area of possible resistance might be found around the $1,960 level which consists of the psychological resistance of the round number as well as the 23.6% of the daily Fibonacci retracement level.