The XAU/USD saw a decline to $2,025 on Friday, marking a 0.40% decrease for the day. Despite soft CPI revisions, the metal was unable to gain traction. The daily chart indicators suggest a bearish bias, with the RSI on a negative slope and the MACD showing rising red bars, indicating selling momentum. On the four-hour chart, indicators show a flat trend, hinting at a consolidation of losses.
Investors are closely watching next week’s Consumer Price Index (CPI) figures from January, as the US downwardly revised the December figures. This will provide insight into the timing of potential rate cuts by the Federal Reserve. While soft CPI revisions have eased pressure for rate cuts, strong Q1 growth predictions and rising wage pressures could delay rate cuts. The market now anticipates a delay in rate cuts, with the possibility of them being pushed from March to May. The upcoming inflation reading will be crucial in determining the timing of the easing cycle and could lead to further downside for the yellow metal if it justifies a delay in rate cuts.
Looking at the technical analysis, the daily chart suggests a dominance of selling pressure, with the RSI and MACD indicating bearish momentum. However, the broader perspective indicates a dominance of buying interest in the long term, despite the short-term bearish trend. The four-hour chart shows a temporary stalemate between buying and selling forces, with indicators flatlining and hinting at a period of consolidation following recent losses.
It is important for investors to keep an eye on the CPI figures and the Federal Reserve’s decisions, as these will continue to drive the direction of the XAU/USD. The broader context suggests a long-term buying interest, but short-term bearish momentum may continue until further economic data is released.
