The last trading week was exciting in the upward trajectory of gold prices XAU/USD, as prices jumped towards the $2033 resistance level, near its all-time high. It closed trading around the $2007 level after testing the $2000 support after announcing stronger numbers for US jobs and in light of trading Limited to market closures for Good Friday. With the start of trading this week, the gold market will interact with stronger-than-expected US job numbers, which support the course of tightening US central bank policy.
Ahead of important and exciting numbers also this week - US inflation and the content of the minutes of the last meeting of the US Federal Reserve - inflation in the United States was largely flat in March, as economists expected a monthly increase in consumer prices on par with the progress we witnessed during the half-year period. The former, will test the strength of the Fed.
Accordingly, government figures on Wednesday are expected to show a monthly rise of 0.4% in the core US consumer price index, which excludes food and energy and better reflects the scope of core inflation facing US households. While down from the 0.5% increase in the previous month, this increase would match the September-February average and keep the numbers up year-on-year. That could help tip the scales towards raising interest rates again at the Fed's May meeting, despite pressure in the banking system and signs of a slowing economy.
Meanwhile, the minutes of the March 21-22 US Federal Reserve meeting, which will also be released next Wednesday, may provide clues about the desire for further policy tightening as well as views on the health of the banking system and lending. The calendar is full of US Federal Reserve updates this week and includes appearances by regional bank chiefs John Williams, Patrick Harker, Austan Goolsby, Neil Kashkari and Thomas Barkin.
Overall, the core CPI in the US is expected to have increased by 5.6% from a year ago, which represents an acceleration from the year-on-year gains for February. Including food and fuel, the price gauge is expected to rise 5.1%, the smallest advance in nearly two years. The US central bank's target, based on a different measure of inflation, is 2%.
Since rising to a four-decade high of 9.1%, the overall CPI has fallen in tandem with lower energy prices. However, these costs may start to rise again after OPEC+ announced on April 2 an abrupt cut in crude oil production. Higher crude oil prices may shift to gasoline and jet fuel as Americans start planning their summer vacation.
Among other US economic reports, the government will release retail sales for the month of March. Economists' project sales fell for the fourth time in the past five months, as rising inflation restricted purchases of goods and consumers allocated more of their discretionary income to services. Elsewhere, Washington will steal the spotlight as finance ministers and central bank governors flock there for the spring meetings of the International Monetary Fund and World Bank. The International Monetary Fund's new economic forecasts will be published on Tuesday, while the meeting of the Group of 20 finance chiefs will begin the following day.
XAU/USD gold price forecast today:
- The general trend of the XAU/USD gold price is still bullish.
- The move around and above the historical psychological resistance $2000 an ounce confirms the strength and continuity of the bulls’ control over the trend.
- At the same time the technical indicators move towards strong overbought levels, and unless gold gets more positive momentum, the price of gold may be exposed for profit-taking sales.
- If this happens, prices may move towards the support levels of 1990, 1945, and 1900 dollars, respectively.
On the other hand, and according to the performance on the daily chart below, the breach of the 2033 resistance may give the XAU/USD gold price the move to breach its all-time high of $2075 an ounce, the level of the height of market and investor fears of the outbreak of the epidemic.
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