Gold Rebound on short covering after hot U.S. CPI

The price of gold (XAUUSD) is still under pressure below $1,730, undoing the previous day’s recovery from an 11-month low on Thursday during the Asian session. The market’s worries about a recession, rising interest rates, and the strength of the US dollar may all be contributing factors to the metal’s downfall.

The consumer price index report for June came out quite strongly on Wednesday last night, up 9.1 percent year over year. If not the U.S. data point of the week. An increase of 8.5 percent year-over-year was anticipated. The CPI increased by 8.6 percent yearly in the May report. There is a 75% likelihood the Fed will have to make another 0.75 percent rate hike at its upcoming FOMC meeting on July 26–27, according to the markets’ initial reactions to the CPI report. There is a 30% possibility that the Fed will raise interest rates by the entire 1.0 percent at the meeting.

According to Reuters, in response to the US statistics, White House (WH) Economic Adviser Brian Deese told CNBC that the CPI data highlights the need for Congress to swiftly adopt legislation to boost semiconductor production in the US. However, US President Biden stated that because gas costs have decreased, CPI data is “out of data.”

Technically, August gold futures prices hit an 11-month low early on today and the reversed course to score a bullish “outside day” up on the daily bar chart. Bears still have the solid overall near-term technical advantage. Prices are in a four-month-old downtrend on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at $1800. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $1700. Reported by Kitco.

Investor should be notes that gold chart is in down trend line and in range from 1707 to 1752. First resistance is seen at today’s high of $1740, $1745 and then at $1751 First support is seen at $1716 and then at today’s low of $1710. Investment is risky, so investors need to set stop-loss function.

Analyzed by: Ms. Teang Riya Independent Analyzed

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