- The XAU/USD retreated to $2,025 on Friday, registering losses of 0.40% on the day.
- Despite soft CPI revisions, the metal failed to gather traction.
- Daily chart indicators hint at a bearish bias, with RSI's negative slope and MACD's rising red bars suggesting selling momentum.
- In the four-hour chart, indicators appear flat hinting at a consolidation of losses.
In Friday's session, the XAU/USD was observed at a trading level of $2,025, marking a dip of 0.40%. Focus is set on next week’s Consumer Price Index (CPI) figures from January after the US downwardly revised the December figures, to continue placing their bets on the next Federal Reserve (Fed) decisions.
In that sense, investors are eyeing the Federal Reserve's moves, as soft CPI revisions seem to have provided a breather for officials considering rate cuts. However, strong Q1 growth predictions in the US market and rising wage pressures amidst a tight job market from the Fed indicate that rate cuts may be delayed. As for now, markets seem to have given up the odds of a cut in March and instead pushed them to May. Next week's inflation reading will be key for the timing of the easing cycle and in case, data justifies the delay of rate cuts, the yellow metal metal may see further downside
XAU/USD technical analysis
Technical indicators on the daily chart initially depict a dominance of selling pressure. The Relative Strength Index (RSI) is on a descending slope and is hovering in the negative domain, suggesting that bearish momentum is currently prevailing. Simultaneously, the Moving Average Convergence Divergence (MACD) displays growing red bars, reinforcing the strength of the selling momentum. However, the broader perspective reveals a different story. Despite the metal trading under the 20-day Simple Moving Average (SMA), it remains comfortably positioned above the 100 and 200-day SMAs. This inclination highlights the dominance of buying interest in the broader context but that the bears are steadily gaining ground in the short term.
XAU/USD daily chart
Turning attention to the four-hour chart, the selling and buying forces appear to have temporarily reached a stalemate. The indicators have flatlined, illustrating a phase of consolidation following recent losses. The Relative Strength Index (RSI) is notably flat, entrenched within the negative zone, which might hint at a persisting bearish sentiment. The Moving Average Convergence Divergence (MACD) also insinuates a slight shift in momentum with flat red bars, proposing the possibility of a period of consolidation.
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD treads water just above 1.0400 post-US data
Another sign of the good health of the US economy came in response to firm flash US Manufacturing and Services PMIs, which in turn reinforced further the already strong performance of the US Dollar, relegating EUR/USD to the 1.0400 neighbourhood on Friday.
GBP/USD remains depressed near 1.2520 on stronger Dollar
Poor results from the UK docket kept the British pound on the back foot on Thursday, hovering around the low-1.2500s in a context of generalized weakness in the risk-linked galaxy vs. another outstanding day in the Greenback.
Gold keeps the bid bias unchanged near $2,700
Persistent safe haven demand continues to prop up the march north in Gold prices so far on Friday, hitting new two-week tops past the key $2,700 mark per troy ounce despite extra strength in the Greenback and mixed US yields.
Geopolitics back on the radar
Rising tensions between Russia and Ukraine caused renewed unease in the markets this week. Putin signed an amendment to Russian nuclear doctrine, which allows Russia to use nuclear weapons for retaliating against strikes carried out with conventional weapons.
Eurozone PMI sounds the alarm about growth once more
The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.