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XAU/USD falls as bears gain traction ahead of US CPI

by SuperiorInvest


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  • XAU/USD retreated to $2,025 on Friday, losing 0.40% on the day.
  • Despite soft CPI revisions, the metal has failed to gain traction.
  • Indicators on the daily chart indicate a bearish bias, with the negative slope of the RSI and the rising red bars of the MACD indicating selling momentum.
  • On the 4-hour chart, the indicators appear to be flat indicating a consolidation of losses.

In Friday’s session, XAU/USD it was observed at the trading level of $2025 which means a decrease of 0.40%. The focus is on next week’s consumers Price index January (CPI) data after the US revised December data downwards to continue betting on the next Federal Reserve (Fed) decision.

Along those lines, investors are watching the Federal Reserve’s moves as soft CPI revisions appear to have given officials considering a rate cut some respite. However, strong 1Q growth forecasts in the US market and rising wage pressures amid a tight labor market from the Fed suggest that rate cuts may be delayed. So far, markets seem to have given up on the chance of a cut in March and instead pushed it to May. Next week’s inflation data will be key to the timing of the easing cycle, and if the data justifies a delay in rate cuts, the yellow metal may see further declines

XAU/USD Technical Analysis

Technical indicators on the daily chart they initially show the dominance of selling pressure. The Relative Strength Index (RSI) is on a downward slope and is moving in negative territory, indicating that bearish momentum is currently prevailing. The Parallel Moving Average Convergence Divergence (MACD) is showing rising red bars, reinforcing the strength of the selling momentum. However, a broader view reveals a different story. Despite the metal trading below the 20-day simple moving average (SMA), it remains comfortably above the 100- and 200-day SMA. This bias highlights the dominance of buying interest in the broader context, but that bears are steadily gaining ground in the short term.

XAU/USD Daily Chart

Turning attention to four o’clock diagramThe selling and buying forces seem to have reached a temporary stalemate. Indicators turned lower, illustrating a consolidation phase after recent losses. The Relative Strength Index (RSI) is remarkably flat, rooted in the negative zone, which could indicate continued bearish sentiment. The Moving Average Convergence Divergence (MACD) also suggests a slight momentum shift with flat red bars, offering the possibility of a period of consolidation.

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