Gold Price Latest – XAU/USD Prints a Fresh Three-Month Low

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GOLD PRICE (XAU/USD), CHART, AND ANALYSIS

• Bearish technical signals send gold tumbling.
• US CPI will lead the next move in the precious metal.

Today’s US inflation data, released at 13:30 UK, will set the tone for gold in the days and weeks ahead. Headline US inflation is expected to move lower to 8.1% in April from 8.5% in March. While any downturn in price pressures will be welcome, it should be noted that the March reading was the highest level of headline inflation seen in the US in over 40 years.

The US dollar remains underpinned and will likely remain that way over the coming months as the Fed continues to hike interest rates. The US central bank is expected to increase rates by a further 200 basis points this year, and while most of this is priced into the greenback, the US dollar will likely appreciate further.

For all market-moving data releases and events, see the DailyFX Economic Calendar.

The daily gold chart shows the precious metal slipping through old horizontal areas of support, not helped by the formation of two bearish shooting star candles. These technical indicators have kept downward pressure on gold. The precious metal is also battling with the 200-day simple moving average for the first time in over three months and if this doesn’t provide support, then gold will look at the 38.2% Fibonacci retracement level at $1,823/oz. as the next level of support. Resistance is seen at $1,871/oz. the 50% Fib retracement.

GOLD DAILY PRICE CHART – MAY 11, 2022

 

Retail trader data show83.87% of traders are net-long with the ratio of traders long to short at 5.20 to 1. The number of traders net-long is 4.78% lower than yesterday and 0.94% lower from last week, while the number of traders net-short is 1.95% lower than yesterday and 20.24% lower from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests Gold prices may continue to fall. Positioning is less net-long than yesterday but more net-long from last week. The combination of current sentiment and recent changes gives us a further mixed Gold trading bias.

What are your views on Gold – bullish or bearish?

 

May 11, 2022 | DailyFX
Nick Cawley, Strategist