The price of gold reversed from a lower support zone of around $1,808 per ounce to $1,894 per ounce this Monday.
“Gold prices hit a one-month high on Monday, recovering sharply from recent losses as markets bet that a burgeoning banking crisis in the US will push the Federal Reserve into softening its hawkish rhetoric in the coming days.
“The dollar fell sharply against a basket of currencies, while an inversion in the yield curve lessened after the failure of Silicon Valley Bank saw markets reassess their outlook for US interest rates, as US regulators rushed to restore faith in the banking system.
“Fed fund futures prices show that a majority of traders now expect a 25 basis point hike by the Fed this month, following initial expectations for a 50 bps hike. This in turn benefited gold prices with the prospect of less severe interest rate hikes in the coming months,” said Investing.com’s Ambar Warrick.
Technical analysis shows gold prices have been testing the strong resistance zone of $1,900 since April 2022, while the price on Monday (March 13), was $1,875.
In the one-hour chart, the descending triangle pattern was moving between $1,850 and $1,900 per ounce, creating an average price of around $1,865 per ounce, resistance-turned-support.
Some important key economic data to be released this week included the Consumer Price Index (CPI), which was 6.4 per cent the previous month, with six per cent forecast.
CPI was scheduled for release on Tuesday (March 14), at 7:30pm Cambodian time.
CPI refers to the change in the price of goods and services purchased by consumers that account for a majority of overall inflation.
Producer Price Index (PPI) data is due out on Wednesday (March 15) at 7:30pm. PPI was 0.7 per cent last month, with 0.3 per cent forecast.
PPI refers to the changes in the price of finished goods and services sold by producers.
It is a leading indicator of consumer inflation – when producers charge more for goods and services, the higher costs are usually passed on to the consumer.
Retail sales data – which was 3.0 per cent last month, with minus 0.3 per cent forecast this month – also needs to be followed up.
Retail sales is a measure of the change in the total value of sales at the retail level, the primary gauge of consumer spending accounting for the majority of overall economic activity.
Consequently, investors should wait for all the data to be released before making a trading decision.