The US Dollar has risen which is causing a corrective bias for the gold price. Technical analyst Ross Burland says gold has entered a support zone for the first balance of the week leaving upside corrections in focus.
Markets will follow ISM surveys
The US 10-year bond yield rose to 3.978% and closed the day, improving from a low of 3.854% to 3.947%. The US dollar index rose after the Personal Consumption Spending (PCE) Price Index, the Federal Reserve’s preferred measure of inflation, rose from 5.3% in December to 5.4% in January, rather than the consensus estimate of 4.9%. He reached 105.32 and finished the day at the top.
As a result, this leaves the view bound to the data. Markets will have to wait a little longer than this week for the Nonfarm Payrolls report, which falls on the 2nd Friday of this month. Instead, ISM surveys will be on the watch list this week. Analysts point to a February recovery for the ISM MFG index after five months of consecutive declines that saw the series drop to 47.4 in January. TD Securities analysts make the following assessment:
Separately, we expect the ISM services index to stabilize around its current level after the notable December-January zigzag in the series. We may revise our projection as more data is released next week.
Gold price and DXY technical analysis
The yellow metal closed lower for the fifth consecutive day on Friday as the market adjusted to the longer-term upside than the Federal Reserve amid evidence the economy continues to warm.
Gold price fell from the trendline resistance midweek and pushed losses to $1,809, a new cycle low, while US Bond yields were up.
The US Dollar is higher and a correction is expected in the initial balance to start the week.
This focuses on the upside of gold price to revisit the previous support and test the trendline resistance as shown on the 4-hour charts above.
Gold price re-enters bears’ course on Tuesday
As the US dollar regained its strength across the market, the gold price entered the bears’ path again on Tuesday. The bright metal is trading above the round $1,800 figure, providing immediate and psychological support. cryptocoin.comGold broke a five-day streak on Monday as the market took a breather from the currently prevailing trend to hawkishly reassess the Fed’s future rate hike path. This looked like a minor correction on the ongoing downtrend path of gold price.
This week, a series of mid-range US macroeconomic statements could help shape how much more room the gold price could have on the downside ahead of the critical Fed meeting on March 22. The US central bank will likely consider all the data before releasing its next monetary policy plan, known as the dot chart. However, the next two weeks will be more effective with the Non-Farm Employment and Consumer Price Index.
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