On Wednesday, the US Bureau of Labor Statistics will publish the April Consumer Price Index (CPI) data. Gold could test 200-day SMA on a hot print, FXStreet’s Eren Sengezer reports.
“If CPI figures confirm the view that inflation may have already peaked in March, the dollar could face renewed selling pressure with investors reassessing the Fed’s rate decision in June. In such a scenario, US T-bond yields are likely to decline and fuel a leg higher in gold. On the flip side, markets should stick to the view of a 75 bps hike in June if CPI data surprises to the upside.”
“A relaxation of coronavirus restrictions in China could help the yellow metal gain traction on improving demand outlook and vice versa.”
“In case XAU/USD starts using $1,880 as support, it could extend its recovery toward $1,900. Only a daily close above the latter could open the door for additional gains toward the $1,920/$1,930 area (Fibonacci 50% retracement of the latest uptrend, 20-day SMA, 50-day SMA).”
“On the downside, key support seems to have formed at $1,860 (static level). In case this level fails, gold is likely to test the 200-day SMA at $1,840.”
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