Gold Price Forecast XAU/USD – Hovering Near 4-Month High on Cooler CPI Hopes

Gold futures are edging lower on Monday in a lackluster trade as investors brace for Tuesday’s U.S. consumer inflation (CPI) report that could have an impact on Wednesday’s U.S. Federal Reserve interest rate decision and economic projections.

The tone of the market the rest of the week is likely to be determined by Fed Chair Powell’s press conference after the announcements.

At 11:31 GMT, February Comex gold is trading $1806.10, down $4.60 or -0.25%. On Friday, the SPDR Gold Shares ETF (GLD) settled at $167.07, up $0.60 or +0.36%.

Traders are also a little on edge ahead of Thursday’s European Central Bank (ECB) and Bank of England (BoE) policy statements and interest rate decisions.

Additionally, Friday’s stronger-than-expected U.S. producer price index (PPI) report shook up traders a little by suggesting that inflation is not cooling enough.

The Fed is widely expected to raise interest rates by 50 basis points at its final meeting of 2022 scheduled on Dec. 13-14.

The U.S. Consumer Price Index (CPI) report for November is due on Dec. 13. Gold could attract buyers if the CPI data comes in cooler than expected.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $1822.90 will signal a resumption of the uptrend. A move through $1752.90 will change the main trend to down.

The minor trend is also up. A trade through $1778.10 will change the minor trend to down. This will shift momentum to the downside. $1819.00 is a new minor top.

The market is currently trading a long-term Fibonacci level at $1804.30. The nearest resistance is the Aug. 10 main top at $1836.70, followed by a long-term 50% level at $1861.30. The nearest support is a pair of 50% levels at $1778.20 and $1771.50.

Daily Swing Chart Technical Forecast

Trader reaction to the Fib number at $1804.30 is likely to determine the direction of the February Comex gold futures contract on Monday.

Bullish Scenario

A sustained move over $1804.30 will indicate the presence of buyers. If this creates enough upside momentum then look for a test of the tops at $1819.00 and $1822.90

Bearish Scenario

A sustained move under $1804.30 will signal the presence of sellers. This could trigger a break into the support cluster at $1778.20 – $1778.10, followed by $1771.50.