Gold Price Outlook: XAU/USD retreats from $4,630 prior to US CPI announcement
Gold Retreats from Record Highs Amid Quiet Trading
Gold (XAU/USD) experienced modest declines during a subdued Tuesday session, slipping from its historic peak of $4,630 but still holding above previous resistance levels near $4,560. The precious metal faced pressure as the US Dollar regained some strength, buoyed by hawkish remarks from Federal Reserve official Williams and investor caution ahead of the upcoming US CPI data release.
With markets anticipating a slight increase in inflation after November’s unexpected slowdown, expectations are for headline CPI to rise at an annual rate of 2.7%. Core inflation is also projected to edge up to 2.7%, compared to 2.6% previously. These figures are likely to dampen hopes for imminent rate cuts from the Fed.
Technical Overview: Gold Pulls Back but Maintains Upward Momentum
The XAU/USD pair encountered resistance at the 127.2% Fibonacci extension near $4,625, yet remains comfortably above December’s high of $4,555. The overall bullish trend persists, supported by the rising 100-period Simple Moving Average (SMA) around $4,440, which continues to act as a dynamic support level.
However, technical signals are beginning to show signs of weakness. The 4-hour RSI, currently at 65, still indicates bullish conditions, but a bearish divergence is emerging on the longer-term trend. The MACD is also nearing a bearish crossover, suggesting that upward momentum may be losing steam.
- Key support levels: December 26 high at $4,555, January 7 high near $4,500, and the 100-period SMA around $4,440.
- Resistance levels: Monday’s high at $4,625 and the 161.8% Fibonacci retracement at $4,714.
(This technical analysis was prepared with the assistance of AI tools.)
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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