For two days in a row, XAU/USD gold prices are trying to rebound to the upside and return to stability above the psychological resistance of $1,800 an ounce. This will confirm the bulls' control after strong selling of gold, reaching the support level of $1,785 an ounce last week.
In general, gold futures settled on the rise, as the US dollar remained. The strong GDP data, which reinforced the case for more monetary tightening from the US Federal Reserve, led to a rise in the dollar by the end of last week's trading.
Economic Outlook
Revised data from the University of Michigan showed that one-year inflation expectations fell by more than previously estimated in December, to 4.4%, revised down from 4.6%. One-year inflation expectations were at an 18-month low, down sharply from 4.9% in November.
Meanwhile, the closely watched Commerce Department inflation reading showed that US consumer price growth slowed more than expected in November. The reading for inflation, which the Fed is said to favor, showed the annual rate of consumer price growth slowed to 5.5 percent in November from an upwardly revised 6.1 percent in October. Economists expected the annual rate of consumer price growth to slow to 5.3% from 6% originally reported for the previous month. On a monthly basis, US consumer prices rose 0.1% in November after rising 0.4% in October, while core consumer prices rose 0.2% in November after rising 0.3% in October.
XAU/USD gold price forecast today:
- The narrow performance will continue to be the market’s performance until the end of the Christmas holidays and the investors’ return to the markets with liquidity.
- Accordingly, the XAU/USD gold price may move in a narrow range.
- The upward retracement will be stronger if it settles above the psychological resistance of $1800 an ounce. This paves the way for a return to the vicinity of the resistance levels 1816 and 1816. 1832 dollars an ounce again, which is sufficient at the same time to move the technical indicators towards overbought levels.
On the other hand the move towards the support level at $1775 an ounce will be important for the bears to regain control of the trend, and thus move towards stronger support levels. I still prefer to sell gold from every level up.
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