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Gold Price Starts Correction, US CPI Next

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Aayush Jindal

Key Highlights

  • Gold prices started a downside correction from the $2,010 zone.
  • A major declining channel is forming with resistance near $1,945 on the 4-hour chart.
  • Crude oil prices are attempting a recovery wave from the $75.00 zone.
  • The US Consumer Price Index could decline from 3.7% to 3.3% in Oct 2023 (YoY).

Gold Price Technical Analysis

Gold rallied further and surpassed the $2,000 level amid the ongoing Israeli–Hamas war. The price traded as high as $2,009 before the bears appeared.

The 4-hour chart of XAU/USD indicates that the price started a downside correction below the $2,000 level. There was a drop below the $1,980 level and the 100 Simple Moving Average (red, 4 hours).

The price spiked below the 50% Fib retracement level of the upward move from the $1,867 swing low to the $2,009 high. The price is now consolidating near the $1,945 zone. There is also a major declining channel forming with resistance near $1,945 on the same chart.

Immediate resistance is near the $1,945 level. The first major resistance is $1,955. An upside break above the $1,955 level could send the price soaring toward the $1,965 resistance. The next major resistance is near the $1,972 level, above which Gold could test $1,985.

On the downside, the first major support is near the $1,938 level. The main support sits near the $1,920 level and the 200 Simple Moving Average (green, 4 hours). It is close to the 61.8% Fib retracement level of the upward move from the $1,867 swing low to the $2,009 high. Any more losses might call for a move toward the $1,900 level.

Looking at crude oil prices, the bulls appeared near the $75 zone and the price is now attempting a recovery wave.

Economic Releases to Watch Today

  • UK Claimant Count Change for Oct 2023 – Forecast 3.0K, versus 20.4K previous.
  • UK ILO Unemployment Rate Feb 2023 (3M) – Forecast 4.2%, versus 4.2% previous.
  • Euro Zone Gross Domestic Product for Q3 2023 (Prelim) (QoQ) - Forecast -0.1%, versus -0.1% previous.
  • US Consumer Price Index for Oct 2023 (MoM) – Forecast +0.1%, versus +0.4% previous.
  • US Consumer Price Index for Oct 2023 (YoY) – Forecast +3.3%, versus +3.7% previous.
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