US Dollar Rises on Higher-than-Anticipated Inflation Data, Gold Drops to Support

Gold Price Forecast: Ahead of US Inflation, XAU/USD deepens losses to about $2,020

  • Gold price loses ground on cautious market sentiment ahead of US Inflation data.
  • The improved Greenback fades the shine of the bright metal.
  • Investors seem to prefer the US Dollar instead of safe-haven Gold during geopolitical tension.

Gold price moves on a downward trajectory that began on January 7, inching lower to near $2,020 per troy ounce during the Asian session on Tuesday. The precious metal is encountering resistance as the US Dollar strengthens for the second consecutive session, supported by subdued US bond yields in anticipation of the release of US inflation data on Tuesday.

The anticipation of inflationary pressures in the United States (US) has led to expectations that the Federal Reserve (Fed) will abstain from reducing interest rates at the March meeting. This outlook is diminishing the appeal of non-yield-bearing assets like Gold. Markets are pricing in only a small 14% probability of a rate cut by the Fed in March. However, the likelihood of a rate cut at the May meeting is estimated to be around 60%.

Dallas Federal Reserve (Fed) Bank President Lorie K. Logan recently stated that there is presently no immediate need to lower interest rates. She acknowledged “significant progress” in curbing inflation but stressed the importance of obtaining additional evidence to ensure the sustainability of this progress.

The price of Gold is facing downward pressure as the US Dollar gains renewed demand amidst escalating geopolitical tensions in the Middle East. Yemen’s Houthi rebels reportedly launched missiles at a ship bound for a port in Iran, resulting in minor damage to the vessel but no injuries to its crew, according to authorities.

Israel conducted a series of airstrikes in the southern Gaza city of Rafah on Monday. Israeli Prime Minister Benjamin Netanyahu expressed his intention on Sunday to escalate military operations in Rafah after rejecting a ceasefire proposal from Hamas.

XAU/USD: TECHNICAL LEVELS TO WATCH

OVERVIEW
Today last price 2019.03
Today Daily Change -1.11
Today Daily Change % -0.05
Today daily open 2020.14
 
TRENDS
Daily SMA20 2027.77
Daily SMA50 2033.07
Daily SMA100 1990.83
Daily SMA200 1966.02
 
LEVELS
Previous Daily High 2027.65
Previous Daily Low 2011.94
Previous Weekly High 2044.63
Previous Weekly Low 2014.92
Previous Monthly High 2079.01
Previous Monthly Low 2001.9
Daily Fibonacci 38.2% 2017.94
Daily Fibonacci 61.8% 2021.65
Daily Pivot Point S1 2012.17
Daily Pivot Point S2 2004.2
Daily Pivot Point S3 1996.46
Daily Pivot Point R1 2027.88
Daily Pivot Point R2 2035.62
Daily Pivot Point R3 2043.59