The gold price has retreated to roughly $1,670.00 in the Asian session after failing to hold above the crucial $1,680.00 level. As the juggernaut gold rise has met with a lengthy liquidation program, the precious metal has suffered light selling pressure. The GOLD price’s upside potential remains strong, as overall market sentiment is quite positive.
Likewise, the US dollar index (DXY) has maintained its Tokyo gains and is trading in a range of over 111.00. The 10-year US Treasury yield has fallen to roughly 4.15% as the likelihood of a 75 basis point (bps) rate hike by the Federal Reserve (Fed) has decreased. According to the CME FedWatch tool, the odds of a continuation of a larger rate hike are 38.5%.
Following the release of the US agency’s impressive payroll data, investors look forward to the release of the Consumer Price Index (CPI) data. According to preliminary projections, the headline CPI will be 8.0%, down from 8.2% in the previous announcement.
While the core CPI, which includes oil and food prices, is expected to fall to 6.5% from 6.6%.
It is important to note that the core inflation rate has not yet shown signs of substantial depletion. Therefore no meaningful shift in core CPI statistics might cause market turbulence.
Gold Technical Outlook
The gold price has seen a strong bullish response after testing the demand zone, which is located on a four-hour scale between $1,615.70-1,618.64.
The precious gold is trading above the 200-period Exponential Moving Average (EMA) at $1,664.20, adding to the upward filters. Meanwhile, the Relative Strength Index (RSI)has switched to the positive zone of 60.00-80.00, indicating that the uptrend has begun.
On the upside, a bullish breakout of the $1,685 level can expose the gold price to $1,700 or $1,710. At the same time, support stays near $1,660. Consider buying over 1,660 and selling below $1685 today until the breakout occurs. Good luck!