Fundamental and Technical Analysis of (XAUUSD)

As we discussed in our weekly analysis, the release of hotter-than-expected inflation data yesterday finally halted the dollar's two-month uninterrupted rally. This is because the results raised expectations for the Fed to step back from its dovish policy of lowering interest rates.

Following the CPI data, the producer price index (PPI) and February retail sales data to be released on Thursday will be closely watched by investors to gauge the US economic landing conditions. Any signs of further resilience in the US economy will give the Fed more room to keep rates higher for longer.

Such a scenario would further weaken gold, as a strong US economy is also likely to reduce demand for the yellow metal as a safe haven. However, gold is still on track for strong gains in 2024.

From a technical perspective, as we expected in our March 8 analysis, gold formed a top at 2193 and has so far corrected to 2150 as we also expected. Going forward, as long as gold does not stabilize below 2150, any dips below that level will be a buying opportunity to retest 2193. If gold stabilizes below 2150, the correction could extend to targets of 2127, 2108, and 2083. If gold manages to stay above 2193, the next closest target will be 2248.57.