Gold prices retreated slightly following hot US CPI data. According to StoneX Group Financial Market Analyst Fawad Razaqzada, the uptrend will continue. Because traders seem willing to consider price declines as buying opportunities. Therefore, Razaqzada says that the latest decline will probably be short-lived.
Gold investors did not rush this week!
cryptokoin.comAs you follow from , gold has seen strong increases in recent weeks. However, it lost some ground with the recent US CPI coming in hot. However, analysts say this is temporary. In an article in City Index, Fawad Razaqzada makes the following assessment:
Following last week’s sharp rise of 4.6%, gold investors were in no rush to push the metal higher at the start of this week. Given the importance of inflation data and following a mixed jobs report on Friday, there was always the possibility of a rebound in bond yields and the dollar.
More earnings on the way soon!
The US February CPI report released on Tuesday showed that both headline and core inflation were higher than expected. This triggered a rally in the dollar and a simultaneous sell-off in government bonds. The analyst said, “As yields rose, the opportunity cost of holding gold also increased, as did selling pressure. However, this weakness is not significant in the grand scheme of things, with the metal losing $25 in gains.” says. Razaqzada notes that even if gold prices were to fall further in the near term, “this would not be a sign that the metal has reached its peak.” In this context, the analyst makes the following statement:
In fact, many investors who missed the opportunity to buy gold when it started rising last month will be waiting to buy the short-term dips. So, more gains may be on the way soon.
Gold’s weakness will be short-lived!
Fawad Razaqzada says stock markets are “quickly shaking off the strong CPI pressure.” The analyst states that gold investors will do the same. Razaqzada expresses his views on this issue as follows:
So, unless we see too much technical damage, there’s a chance we’ll see gold and silver stage a comeback later in the day or later in the week. Gold’s weakness will be short-lived, with the market confident of a rate cut in June despite a slightly stronger CPI report.
Even if gold weakens further in the short term, this would be a buying opportunity!
Turning to the technical chart, Razaqzada says that “gold has the potential to weaken a little more. However, he notes that short-term key support is currently around $2,146, the high seen in December. He notes that this is not too far away. The analyst interprets the technical picture as follows:
Below this level, $2,100 is the next round level to watch, followed by long-term support near $2,081/88, which was once a strong resistance. Therefore, even if gold weakens further in the short term, this will not be a sign that gold has reached its peak. In fact, many investors who missed the opportunity to buy gold when it started rallying last month will be waiting to buy the short-term dips.
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