Gold Price Forecast: XAU/USD plummets below $1,840 ahead of US CPI, 200-EMA surrenders
Gold price (XAU/USD) has plunged below $1,840.00 as investors are jittering over the disclosure of the US Consumer Price Index (CPI) in the New York session. The gold prices shifted into a negative trajectory after slipping below the previous week’s low at $1,854.48. The sheer downside move after surrendering the previous week’s low support has prepared the bright metal for a downside journey towards the psychological support of $1,800.00.
Investors see the yearly US CPI at 8.1% while the core CPI, excluding food and energy, at 6%. The expected figures are lower than the former ones but the odds of a 75 basis point (bps) by the Federal Reserve (Fed) in its monetary policy meeting in June are rock solid. Meanwhile, comments from Cleveland Fed President Loretta Mester have bolstered the fact that the Fed won’t get softer on interest rates sooner. Fed policymaker believes that the central bank won’t stop until it finds a ‘compelling’ slippage in inflation numbers. Currently, the situation is pointing to a tougher fight to slow down the pace of inflation.
Gold technical analysis
The gold price has surrendered the cushion of the 200-Exponential Moving Average (EMA), which is trading at $1,859.22 on the daily scale. The precious metal has tumbled to near the trendline placed from 9 August 2021 low at $1,687.78. Meanwhile, the Relative Strength Index (RSI) (14) has shifted into a bearish range of 20.00-40.00 for the very first time this year and is pointing to more downside ahead.
Reference by: Investing.com
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