Gold is dragged down, trading around $1,830. However, an enormous miss on US CPI may drive XAU/USD above the 200-day moving average (DMA) at $1850, FXStreet’s Dhwani Mehta informs.
See – Gold Price Analysis: XAU/USD bulls begin of the shadows to mull a test of $1850 – DBS Bank
US dollar’s haven demand lifted on Middle East tensions
“Heading into the US CPI showdown this Wednesday, gold returns to the red zone, because the US dollar’s safe-haven demand remains hip amid an escalation of tensions between Israel and Gaza. Further, markets remain unnerved before the US CPI April month report amid concerns of a possible acceleration in price pressures and its implication on the economy.”
“A CPI disappointment could tame inflation fears and squash Fed’s tapering and tightening expectations, which is probably going to trigger a renewed burst of demand for the gold price.”
“A daily closing above the 200-DMA at $1850 could revive the bullish bets towards the $1900 mark.”
“Gold prices could challenge Tuesday’s low of $1818, below which the May 7 low of $1813 are going to be on the sellers’ radars. The 100-DMA at $1796 could act as a robust support if the correction from multi-month highs of $1846 regains traction.”
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