Crypto / Forex Broker ReviewsPrice Analysis

XAU/USD Trade Near Last Week’s High, CPI in View

There was a lot of positive bias in the trade of spot gold on Monday as its price reached about $1813, going up around 0.3% on the excellent trading day. This comes on the heel of finding support after a preceding dip back to the 200-day MA at $1808.

As of Monday, Friday’s high at $1815, which preceded the US jobs report, was sealing the price action, but the speed for an upward break also seemed like it was there. If the XAU/USD breaks over the $1815 resistance, it is going to be a clear way back to the top at $1830; it will also be the next target of bullish investors.

XAU/USD price Chart. Source TradingView

A Brilliant Performance

Many analysts are shocked at the performance of gold and how strongly it has held up in the past few weeks, in spite of increasing American and worldwide bond yields on continuous hawkish policies from various central banks, especially as regards the Federal Reserve and the European Central Bank. 

A case study is what happened last week after the European Central Bank on Thursday opened the gate to a myriad of interest rate increases in the Eurozone for the year; it was followed on Friday by the American jobs data, which raised the of a possible 50 basis point (rather than a 25 basis point increase) Federal Reserve increase in Match, gold subsequently finished the week up by almost 1.0%.

Analysts with Saxo Bank have said that gold has performed brilliants in the last month as a hedge against falling stock prices and sporadic rises in bond yields. It is thus what adds to the backdrop of instances for the precious metal now. 

They added to their statement that the non-transitory inflation in several economies also shores up the value of gold in the short and long terms, and another critical situation that cannot be overlooked is the political tensions affecting the market, especially in Eastern Europe between Ukraine and Russia.

Expectations this Week

Going forward, the major obstacle that gold may face this week aside from the expected statements from speakers of the G7 Central Banks might be the American Consumer Price Inflation (CPI) data for last month.

Naturally, upward data will be aligned with lesser gold prices because it would signal a hawkish Federal Reserve policy disposition coming on the way. Nevertheless, as investors are looking forward to an inflation and bond downtime protection, there are also possibilities that gold will perform higher even if the American inflation goes higher than expected.     

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