Gold Price Forecast: XAU/USD bearish head and shoulders in play, eyes on $1,850 DollarIndex Fed Commodities SEO Gold
At the time of writing, Gold price is flat on the day at $1,876 but it had travelled between a low of $1,867.22 and reached a high of $1,886.69.The moves come ahead of the December inflation report, which is expected to show US prices rose by an annualized 6.5%. This is lower than November's 7.1% pace. Investors are monitoring the Consumer Price Index closely as the expectations are that if it were to continue to decelerate, so too will the Federal Reserve's pace of rate hikes.
''Indeed, we forecast a firm 0.3% MoM increase, as services inflation likely gained momentum. In terms of the headline, we expect the Consumer Price Index inflation to register a slight decline on an unrounded basis in December, but rounded up to flat MoM, as energy prices offered large relief again. Our MoM projections imply that headline and core CPI inflation likely lost speed on a YoY basis in December.
The M-formation on the US dollar chart is a reversion pattern and the price would be expected to move in for the restest of the resistance structures and neckline of the pattern between 103.50 and 104.00. Such a move in the US Dollar would align with a 38.2% Fibonacci retracement and a 50% mean reversion at the extreme, a major weight for Gold price.
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