Gold Price Analysis: XAU/USD pulls back from weekly highs, remains contained near $1,820
|- Spot gold prices are consolidating in the $1,820 area, just below earlier weekly highs, as focus turns to US CPI.
- US yields and the US dollar are a little higher this morning, weighing on XAU/USD a tad.
- But the spot metal continues to perform well on the week, as analysts cite ongoing geopolitical uncertainty as supportive.
Spot gold (XAU/USD) prices have come off the boil following Monday’s decent push higher and are for now consolidating in the $1,820 area, down about 0.1% on the session, after topping out this week around $1,823. US yields have turned higher again on Tuesday and the US dollar is gaining as the euro gives back some of last week’s post-hawkish ECB gains, which isnt helpful to the precious metal, though it still trades about 0.5% up on the week.
Gold’s resilience to higher US yields in recent weeks has baffled some. “"It's hard to say exactly why gold continues to see so much support” analysts at OANDA told Reuters. “The unstable environment in the markets may be feeding some of the safe-haven appeal,” they continued, adding “it's more likely to be inflation anxiety”. Others have cited the ongoing uncertain geopolitical backdrop as Russia continues to amass troops on its border to Ukraine.
Ahead, gold traders will be closely watching the release of US Consumer Price Inflation data for January this Thursday, which is expected to show the headline YoY rate rising to 7.3%, which would be the highest since 1982. Reuters says that a “robust inflation figure could increase pressure on the Fed for faster tightening and raise the opportunity cost of holding non-yielding bullion”.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.