Article by: ETO Markets
The US Dollar initially declined intraday in response to the announcement of US CPI data, but it soon recovered along with US Treasury bond yields as investors took in the information and considered its possible ramifications in advance of Wednesday's Fed decision. The price of gold fell below $1,980 after temporarily rising to $1,997 in an impulsive response to the US CPI report.
The daily chart shows that gold price has established a firm base below the multi-week lows of $…, and is now headed to test the 50-DMA at $... With the Relative Strength Index below the 50 mark and trending downward, more downside is predicted. A test of the 100-DMA at $… cannot be ruled out if the negative momentum picks up steam and threatens the flattish 200-DMA at $...
However, acceptance above the 20-DMA at $… on a daily candlestick closing basis will be necessary for a sustained rebound. The $… high from November 27 will then be the focus of gold buyers as they go into the $… supply zone.
