Gold price is on the right path to recording its fourth consecutive week of gains. Indeed, it has been in the green since Friday last week. Ahead of the US CPI data release on Thursday, the precious metal was up by 0.11% at $1,878.59 as at the time of writing.
Fundamentals
Gold price movements remain largely pegged on the Federal Reserve’s monetary policy and US inflation. In fact, since early November, the precious metal has rallied by about 16%. The bullish trend has been founded on prospects that US inflation has peaked and that the Fed will eventually embrace a dovish stance.
In the past CPI data release, the US Labor Department indicated that consumer prices had increased at a slower-than-expected pace of 7.1% YoY compared to the forecast 7.3%. Notably, the figures have been on a steady decline since June 2022. In the release scheduled for Thursday, analysts expect a further decline to 6.5%.
Additionally, gold price will continue to find its support in its status as a safe haven in times of economic uncertainties. This comes as investors remain concerned over a probable recession in major economies like the US and the rest of the world.
Gold price prediction
As gold price extends its previous gains, it is finding support at 1,870; a level that had been an evasive one for about seven months. Notably, both the fundamentals and technicals point to further gains in the ensuing sessions. With regards to the latter, the precious metal is trading above the 25 and 50-day exponential moving averages. Besides, since the emergence of a golden cross in mid-November, the short-term EMA has remained above the medium-term one.
At the same time, it is approaching the overbought territory with an RSI of 69. All these technical indicators point to the continuation of the bullish trend. With the US CPI data in focus, gold price may continue finding support at 1,870. A pullback from that level would have the bulls keen on defending the crucial support at 1,850.
On the upside, the bulls will need to gather enough momentum to break the resistance at 1,895 in order to rally further to the next target at 1,920. However, this bullish thesis will be invalidated by a move below the 25-day EMA at 1,820.
