Gold Price Forecast: XAU/USD eases within range, awaits US inflation gauges

XAU/USD Current price: 2,032.97

• Upbeat US data provided modest support to the US Dollar.
• United Kingdom inflation eased further in November, boosting the market’s mood.
• XAU/USD retreats from its weekly high, holds well above $2,000.

Spot Gold trades marginally lower on Wednesday, confined to Tuesday’s range. The US Dollar gathered some strength at the beginning of the day, while United States (US) data released after Wall Street’s opening provided additional support to the USD against safe-haven rivals. The US reported that CB Consumer Confidence improved to 110.7 in December from a downwardly revised 101.0 in November while beating the 104.6 forecast.  XAU/USD eased from an intraday high of $2,043.57, and changes hands near its daily low of $2,029.46.

Financial markets recovered their optimism mid-European morning, as the United Kingdom reported that inflation in the country eased further in November. The Consumer Price Index (CPI) declined by 0.2% MoM while increasing 3.9% from a year earlier, below expectations of a 4.4% advance. On Tuesday, Canada reported the November annual CPI at 3.1%, unchanged from its previous reading, but slightly above the 2.9% forecast.

Investors still await the United States (US) Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve’s (FED) favourite inflation gauge, to be released on Friday. Financial markets could react aggressively to the figures, as they could confirm or deny the Fed’s pivot on monetary policy.

XAU/USD short-term technical outlook

The daily chart for XAU/USD shows bulls retain control. The pair develops above all its moving averages, with the 20 Simple Moving Average (SMA) maintaining its bullish slope and providing dynamic support at around $2,022.50. The longer moving averages, in the meantime, head marginally higher far below the shorter one, although without enough strength. At the same time, technical indicators aim marginally lower within neutral levels, lacking enough directional strength to confirm a continued slide.

In the near term, and according to the 4-hour chart, XAU/USD is neutral. The bright metal rests above a flat 20 SMA, which develops above also directionless 100 and 200 SMAs. Technical indicators, in the meantime, turned lower, but hold within positive territory with limited downward strength.

Support levels: 2,022.50 2,009.10 1,996.70

Resistance levels:  2,047.90 2,065.60 2,076.10