Gold Price Facing Uphill Task Near $1,875
- Gold price is facing a strong resistance near $1,875 and $1,880.
- The price seems to be consolidating above the $1,825 support zone.
- EUR/USD popped above the 1.2100 resistance; GBP/USD surged above 1.3800.
- The US CPI increased 1.4% in Jan 2021 (YoY), less than the market forecast of 1.5%.
Gold Price Technical Analysis
There were additional losses in gold price below the $1,800 level against the US Dollar. The price traded as low as $1,784 before it started an upside correction.
The 4-hours chart of XAU/USD indicates that the price was able to recover above the $1,800 level. There was also a break above a connecting bearish trend line at $1,830.
The price is now struggling near the $1,845 level and the 100 simple moving average (red, 4-hours). The next key resistance is near the $1,865 level and the 200 simple moving average (green, 4-hours).
The main resistance for the bulls is near the $1,875 and $1,880 levels. A proper close above the $1,880 level is must for upside continuation. Conversely, the price might struggle to continue higher and it could below the $1,825 support. The next key support sits near the $1,800 level.
Fundamentally, the US Consumer Price Index for Jan 2021 was released yesterday by the US Bureau of Labor Statistics. The market was looking for an increase of 1.5% in Jan 2021, compared with the same month a year ago.
The actual result was lower than the market forecast, as the US CPI increased 1.4%. The monthly change was +0.3%, in line with the market forecast.
The report added:
The index for all items less food and energy was unchanged in January. The indexes for apparel, medical care, shelter, and motor vehicle insurance all increased over the month. The indexes for recreation, used cars and trucks, airline fares, and new vehicles all declined in January.
Overall, gold price is consolidating in a range and it must break $1,880 for a decent upward move. Looking at EUR/USD and GBP/USD, there are positive signs emerging above 1.2100 and 1.3800 respectively.
Economic Releases to Watch Today
- US Initial Jobless Claims - Forecast 757K, versus 779K previous.