Gold Price Forecast: XAU/USD risks testing the $1,702 support on US core CPI upside surprise

Gold price is posting small losses this Tuesday. XAU/USD could attack $1,700 on a US core CPI upside surprise, FXStreet’s Dhwani Mehta reports.

Upside surprise to the monthly US core CPI cannot be ruled out

“The monthly core CPI is likely to hog the limelight and risks an upside surprise, which could trigger a sharp US dollar rally, implying an extension of the latest leg down in the bullion.” 

“Gold bulls could regain the upside traction on an unexpected easing in the core CPI MoM reading, as it could hint at a probable slow down in the Fed’s tightening path from November.” 

“The metal appears vulnerable to further downside risks, as the previous day’s low of $1,712 remains in sight. Further down, the channel resistance-turned-support at $1,702 could challenge the bullish commitments.”

“Gold bulls need to recapture the 21-Daily Moving Average (DMA) at $1,735 on a daily closing basis to unleash the additional recovery. The downward-sloping 50 DMA at $1,741 will be the next stop for buyers on a sustained upside. The last line of defense for XAU sellers is at the $1,750 psychological level.”

See – US CPI Preview: Forecasts from 12 major banks, inflation begins to ease