Gold price looks supported but needs to pass through more filters for a confident reversal
Gold price (XAU/USD) is on a temporary cushion after an intense sell-off as investors hope that the modest pickup in the United States Consumer Price Index (CPI) for July is insufficient to force the Federal Reserve (Fed) to raise interest rates further in September. The precious metal attempts a recovery, but an upside isn’t warranted as investors are worried that inflation remains sticky amid rising rental prices.
US inflation rose at a steady pace of 0.2%, as expected by investors and aligned with the Fed’s required inflation rate of 2%. The recovery move in the Gold price is supported by a restricted upside in the US Dollar as chances of a rate cut in 2024 increase. San Francisco Fed President Mary Daly joined policymakers Patrick Harker and John Williams to open the door for rate cut discussions in 2024 depending on the evolution of the inflation economy. Gold price rebounds after momentum oscillators on a lower timeframe reported that the bearish impulse weakened due to a decline in selling pressure. Still, for a confident reversal, the yellow metal has to pass through plenty of filters. Gold price is on tenterhooks as it has corrected to near the 200-day Exponential Moving Average (EMA) around $1,907.68. Failure to sustain above this level would likely push the precious metal into bearish territory.