Gold Price Faces Key Challenges, US CPI Declined To 6.4%
- Gold price struggled to clear the $1,865 resistance zone.
- A key bearish trend line is forming with resistance near $1,862 on the 4-hours chart.
- EUR/USD and GBP/USD spiked lower after the US CPI release before recovering.
- The US Consumer Price Index increased 6.4% in Jan 2023 (YoY), down from 6.5%.
Gold Price Technical Analysis
Gold price struggled to start a recovery wave above $1,870 against the US Dollar. The price made a couple of attempts, but the bulls failed to clear $1,865 and $1,870.
The 4-hours chart of XAU/USD indicates that the price declined sharply after the US CPI data was released. The US Bureau of Labor Statistics stated the US CPI declined to 6.4% on a yearly basis in January from 6.5% in December.
There was a strong decline below the $1,865 and $1,860 support levels. The price even spiked below the $1,850 level. However, the bulls were active near the $1,842 zone.
The price recovered and climbed above the $1,850 level. It is still facing a strong resistance near $1,865. There is also a key bearish trend line forming with resistance near $1,862 on the same chart.
The main resistance is near the $1,870 zone and the 100 simple moving average (red, 4-hours), above which the price might rise towards the 200 simple moving average (green, 4-hours).
On the downside, an initial support is near the $1,850 level. The next major support is near the $1,842 level, below which gold price might struggle to stay above the $1,835 zone. In the stated case, gold price could slide towards the $1,820 support.
Looking at EUR/USD, the pair also spiked lower below the 1.0750 level before recovering higher. It is still facing hurdles near 1.0800.
Economic Releases to Watch Today
- UK Consumer Price Index for Jan 2023 (YoY) – Forecast 10.3%, versus +10.5% previous.
- UK Core Consumer Price Index for Jan 2023 (YoY) – Forecast +6.2%, versus +6.3% previous.
- US Retail Sales for Jan 2023 (MoM) – Forecast -0.2%, versus +0.6% previous.