Gold Price eases from five-week high to consolidate the biggest daily jump in a month.
Gold Price (XAUUSD) retreats from a three-week-old resistance line as risk-aversion underpins the US dollar’s safe-haven demand. That said, the yellow metal’s latest weakness could be linked to the jump in the hawkish Fed bets, as well as China’s covid woes and the technical analysis. However, the bears await more updates on the key catalysts, while also waiting for the Fed’s verdict, to determine short-term XAUUSD moves.
Gold Price struggles to cheer DXY pullback
US Dollar Index (DXY) dribbles around a one-month high, retreating to 104.42 after refreshing the monthly top by the press time, as the US inflation data bolstered expectations of faster/heavier rate hikes by the Fed. However, the market’s indecision tests greenback buyers amid a sluggish Asian session.
Inflation woes weigh on XAUUSD
The headline US inflation, Consumer Price Index (CPI), rose to 8.6% YoY versus 8.3% expected while the Core CPI jumped 6.0% YoY compared to the expected drop to 5.9% from 6.2% a month earlier. A jump in the US inflation numbers propel the US Fed policymakers toward aggressive monetary policy action and weigh on Gold Price.
Gold Price technical outlook
Gold Price again fades bounce off the 200-DMA as it reverses from a three-week-old ascending resistance line by the press time.RSI (14) retreat also hints at the metal’s further weakness even though the bullish MACD signals keep buyers hopeful until the quote stays beyond the 200-DMA support of $1,842.
Even if the quote drops below $1,842, multiple levels marked since mid-May, around $1,830-25, could challenge the XAUUSD bears.Meanwhile, an upside clearance of the aforementioned resistance line, near $1,878 by the press time, isn’t an open invitation to the gold buyers as the 50-DMA level surrounding $1,883 adds to the resistance levels.
Even if the quote rises past $1,883, the 50% and 61.8% Fibonacci retracement (Fibo.) of the April 18 to May 16 downturn, around $1,893 and $1,917 in that order, will be challenging the XAUUSD’s advances.
GBP/USD falls below 1.2200 on unabated dollar strength
GBP/USD is down more than 100 pips on a daily basis on Monday and trades below 1.2200 for the first time in a month. Disappointing macroeconomic data releases from the UK and the broad-based dollar strength continue to weigh heavily on the pair.
EUR/USD drops to multi-week lows near 1.0450 amid risk-aversion
EUR/USD has extended its daily decline toward 1.0450 in the European session and touched its weakest level in three weeks. The risk-averse market environment helps the dollar continue to gather strength against its rivals at the start of the week.
Gold eyes $1,845 and $1,842 on aggressive Fed tightening bets
Gold Price is correcting sharply from five-week peaks of $1,879, reversing most of Friday’s strong rally. The inverse correlation between the US Treasury yields and the bright metal is back in play.
Potential targets for the crypto crash
Bitcoin price has crashed quite a bit over the weekend, taking Ethereum, Ripple and other altcoins with it. The cause seems to be two-fold – fears around the solvency of the Celsius Network and the CPI announcement.