Gold Price Forecast: Bulls maintain the pressure despite a better market mood

XAU/USD Current price:  $1,824.25

• US annual inflation was confirmed at 7% YoY in December, core CPI at 5.5%.
• Wall Street is up, while government bond yields approach their weekly lows.
• XAU/USD has its bullish potential intact despite the lack of follow-through.

Market participants are ignoring gold this Wednesday, looking for high-yielding assets in a risk-friendly environment. The American dollar is weaker across the FX board, maintaining the bright metal afloat and near its weekly high, just above the 1,820 level. XAU/USD peaked at $1,825.43 a troy ounce following the release of US inflation figures. The Consumer Price Index was confirmed at 7% YoY in December, upwardly revised from a preliminary estimate of 6.8%. The core reading, however, came in above expected, hitting 5.5%.

Heating US inflation has been a risk-off catalyst, which did not happen this time, with the reading coming in line with expectations, although at a 40-year high. Stocks trade firmly higher, while US Treasury yields ticked lower, holding to modest intraday losses.

Gold price short-term technical outlook

The  XAU/USD pair daily chart maintains the risk skewed to the upside, despite it losing momentum in the last 24 hours. The daily chart shows that the 20 SMA is slowly advancing above flat longer ones, although technical indicators have turned marginally lower within positive levels.

In the 4-hour chart, the picture is neutral-to-bullish as technical indicators remain directionless near oversold readings, while the metal is far above its moving averages, with the 20 SMA crossing above the 100 SMA, both around 1,805. Further gains could be expected on a break above January monthly high at 1,829.59

Support levels: 1.814.60 1,805.00 1,797.70

Resistance levels: 1,829.60 1,842.85 1,853.10

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