XAUUSD | The return to $1900 is getting closer!

The price of gold has seen a decline below $2,030, after reaching $2,040 in response to recent changes in inflation trends in the United States. Meanwhile, the yield of the main ten-year US government bond remains steadily above 4.1%, creating hurdles for the XAU/USD currency pair in seeking positive momentum. Currently, the price of gold (XAU/USD) is in a consolidation phase, remaining within a trading range already evident since the beginning of the week. Stronger macroeconomic data from the United States, along with assertive comments from various influential members of the FOMC, indicate that the Federal Reserve (Fed) will maintain high interest rates for an extended period. This situation, coupled with growing confidence in "risk" in global stock markets, poses a significant obstacle for gold, traditionally considered a safe haven. Investors remain awaiting the upcoming US consumer inflation data, which could provide crucial insights into the timing and potential frequency of Fed rate cuts in 2024. Downward revisions to December's monthly inflation data, from 0.3% to 0.2%, will help shape the Fed's future decisions. The Fed's readiness to lower interest rates will directly impact the price of gold, reducing its opportunity cost as a non-profitable asset. Currently, the probability of a 25 basis point interest rate cut in May, according to the CME FedWatch tool, stands at 51%. The Fed, in considering rate cuts, continues to closely monitor its dual mandate of inflation control and employment promotion. In the context of the US labor market, weekly initial jobless claims data indicate a positive trend, with a steady decrease. Uncertainty about future Fed rate cuts is leading to increased use of the US Dollar by market operators. Personally, I anticipate further liquidation below $2,007, following the downward trend supported by the channel outlined in the chart, followed by a rally up to retest the $2,054 trendline, then a decline towards the $1,920 level. Wishing everyone a good weekend, Nicola.

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Significant downward after the CPI release, now waiting for the retest of the supply zone before going short

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Waiting the retest of the supply zone before going short

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XAUUSD is ready for the retest, waiting for entering short.