A daily close above the 50-Day line is bullish and may provide a clue that indicates further underlying strength in the price of natural gas. Also, the 38.2% Fibonacci retracement level at $3.51 was exceeded for the second time today and a strong close above that price level looks likely. However, today’s rise was the first test of resistance around the 20-Day MA since the drop below it on January 27. Resistance has been seen but whether it can be sustained remains to be seen. Given the signs of underlying strength, a reclaim of the 20-Day MA may be possible before a pullback.
Reclaim of 20-Day Line Would Show Further Strength
If the 20-Day MA can be reclaimed, the next higher target zone is from around $3.64 to $3.69. That price zone consists of the prior swing high and peak for 2023 at $3.64, a 50% retracement level at $3.67, and a 127.2% extended target for a small rising ABCD pattern (not shown). The initial target for the ABCD pattern was completed at $3.58.
Now that the 20-Day line has fallen to converge with the $3.58, the $3.58 price zone takes on greater potential significance. Since a breakout above the 2023 high of $3.64 provided a new bullish trend reversal signal for the long-term trend in late-December, it is a key price level. A rise above it would be bullish, and especially a daily close above it.
Last week’s price range and likely this week as well are within the price range from two weeks ago from $2.99 to $3.83. Since the low end of the price range was tested as support with last week’s low, an upswing to test resistance near the week’s high could be in process.
For a look at all of today’s economic events, check out our economic calendar.
Home Depot’s stock price (HD) rose in the intraday levels, after leaning on the support of the 50-day SMA, lending the stock positive momentum, amid the dominance of the main upward trend, while trading alongside the secondary short-term trend line, with positive signals from the RSI after reaching oversold levels.
Therefore we expect more gains for the stock, targeting the pivotal resistance of $440.97, provided the support of $401.76 holds on.
The United States Consumer Price Index was higher than anticipated in January.
Fed Chairman Jerome Powell testified before Congress, poured cold water on market concerns.
XAU/USD recovered roughly $40 from its daily low, showing buyers are happy adding on dips.
Spot Gold recovered from an intraday low of $2,863.61 and trades above the $2,900 mark in the mid-American session. Financial markets are quite volatile in the second half of the day after multiple key headlines coming from the United States (US).
On the one hand, the country released the Consumer Price Index (CPI), which rose by 3.0% in January compared to a year earlier. The core annual reading printed at 3.3% vs. the expected 3.1%, while, on a monthly basis, the CPI rose 0.5%, higher than the 0.4% posted in December. All figures were above expectations, immediately triggering demand for the safe-haven US Dollar (USD) amid speculation the US Federal Reserve (Fed) will further delay any potential interest rate cut.
The XAU/USD pair fell to the aforementioned low, yet the slide was limited amid Gold’s safe-haven condition. The pair recovered as Fed Chairman Jerome Powell testified before Congress. Powell tried to put things back in balance by noting that the economy is “close, but not there” on inflation. Additionally, he repeated that the central bank makes its decisions based on the economy’s performance. Finally, he said that policymakers want to keep the monetary policy restrictive for now while acknowledging that it is possible officials will have to move the policy rate on tariffs.
Somehow, Wall Street managed to reverse part of its early losses with Powell, putting pressure on the USD and helping XAU/USD recover its bullish pose.
XAU/USD short-term technical outlook
From a technical point of view, the daily chart for XAU/USD shows overbought conditions persist, yet there are no clear signs of an upcoming slide. Technical indicators have turned flat within extreme levels and even aim marginally higher. At the same time, XAU/USD develops far above all its moving averages, with the 20 Simple Moving Average (SMA) heading firmly north at around $2,798.00 while far above the 100 and 200 SMAs.
In the near term, and according to the 4-hour chart, Gold is bullish. XAU/USD is advancing, breaking above a bullish 20 SMA, while the intraday dip has stalled far above a bullish 100 SMA. The Momentum indicator pared it slide around its 100 line but holds around it. However, the Relative Strength Index (RSI) indicator has already changed course and aims north at around 59, supporting another leg north.
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Crude oil price succeeded to achieve our waited target at 73.90$ and found solid resistance there, to show some bearish bias and head towards potential retest to the breached resistance of the bearish channel that appears on the chart, and the EMA50 meets the breached resistance to add more strength to the support line formed there.
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Gold sellers test the key support on the 4H chart, as US CPI inflation data looms.
Gold price consolidates the previous pullback from record highs of $2,943, struggling below $2,900 early Wednesday. All eyes now remain on the high-impact US Consumer Price Index (CPI) data due later in the day for fresh directional impetus in Gold price.
Will US CPI data accentuate Gold price correction?
Markets are battling uncertainty surrounding US President Donald Trump’s plans for reciprocal tariffs and Federal Reserve (Fed) easing trajectory, leaving Gold price in a limbo, with traders cashing in on their long positions heading into the critical US inflation test.
Traders remain on tenterhooks as they remain expectant of Trump’s reciprocal tariffs coming into effect from Wednesday but it is not yet confirmed whether the tariffs will come through later in the day.
When asked if reciprocal tariffs are still coming on Wednesday at an event to welcome home a hostage released by Russian President Vladimir Putin late Tuesday, President Trump said ‘we’ll see’.
Meanwhile, the Wall Street Journal (WSJ) reported that Trump’s team is working on reciprocal tariffs this week via executive action, bypassing Congress.
The speculations around Trump’s tariffs revive the US Dollar’s (USD) as a safe-haven asset, weighing negatively on Gold price. The bright metal also bears the brunt of the hawkish commetary by Fed Chairman Jerome Powell during his Congressional testimony on Wednesday.
Powell hinted that the central bank would maintain its current policy stance, saying that “with the economy remaining strong, we do not need to be in a hurry to adjust our policy stance.”
Markets altered their expectations of Fed interest rate cuts this year to only one in July, fuelling a decent recovery in the US Treasury bond yields at the expense of the non-interest-bearing Gold price.
The next directional move in gold price is on the US CPI release and Trump’s implementation of reciprocal tariffs. The US annual CPI inflation is expected to remain at 2.9% in January while the core figure is seen easing slightly to 3.1%. The monthly headline CPI and core numbers will likely arrive at 0.3% in the same period.
An unexpected increase in the headline CPI could double down on the latest hawkish expectations surrounding the Fed’s policy outlook, driving the USD and the US Treasury bond yields northward while exacerbating the pain in Gold price. Conversely, on a downside surprise, Gold could resume its uptrend on renewed bets of two Fed rate cuts.
However, US President Donald Trump’s tariffs announcement could also remain a key market driver in the sessions ahead.
Gold price technical analysis: Four-hour chart
Gold price fell short of the measured target of the Bull Flag on the four-hour chart at $2,962 and pulled back sharply on Tuesday.
Gold sellers remain in control and challenge the critical 21-four hourly Simple Moving Average (SMA) at $2,890.
A four-hourly candlestick closing below that level will provide extra legs to Gold price’s corrective downside, calling for a test of the 50-four hourly SMA at $2,857.
The last line of defense for Gold buyers is the 100-four hourly SMA at $2,808.
The Relative Strength Index (RSI) has turned lower but defends the midline, currently near 52.50, suggesting that the downside could be limited.
Any upswing will need acceptance above the $2,905 static resistance.
If buyers manage to scale the latter decisively, the door will open toward the record high of $2,943.
Gold FAQs
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
The Department of Energy’s statistical arm boosted its outlook Tuesday for U.S. natural gas prices in 2025 and 2026, tempering hopes for lower heating costs for some Americans.
The U.S. Energy Information Administration included the numbers in its latest short-term energy outlook — the first it has released under the new Trump administration. President Donald Trump pledged last year on the campaign trail to slash energy prices in half in 18 months, even as forecasts have indicated that natural gas prices could rise.
In its latest assessment, EIA said the natural gas price at the U.S. benchmark Henry Hub is expected to average $3.80 per million British thermal units in 2025 — up about 21 percent from its last forecast. EIA also raised its estimate for 2026, putting the annual average price at $4.20 per million Btus, compared with $4 in its January report.
The agency said “above-average withdrawals from underground natural gas storage” in January pushed prices higher, as did cold weather in mid-January. The Henry Hub spot price averaged $4.13 in January, EIA said, up from $3.01 in December.
Copper price surrendered to the solid resistance formed at 4.6900$ to form correctional bearish rebound and activate the attempts for the expected profit gaining by targeting 4.5200$ level.
Now, stochastic exit from the overbought areas will increase the negative pressures on the price to expect forming additional correctional waves that might push it to reach 4.4600$ and 4.4000$ levels.
The expected trading range for today is between 4.4600$ and 4.6400$
The GBPJPY pair succeeded to activate the bullish track, taking advantage of the stability of the major support at 187.00 to form many bullish waves by reaching the previously targeted barrier at 189.50.
Also, resuming the bullish attack this morning and recording additional gains by reaching 191.25 confirm its regain to the bullish bias, to expect getting positive momentum by stochastic to reach 192.30 level soon, followed by attempting to test the MA55 at 193.55.
The expected trading range for today is between 189.70 and 192.30
Silver price ended yesterday above 31.63$ level and the negative pressure that it witnessed in the previous sessions, to keep the bullish trend scenario active for the upcoming period, organized inside the bullish channel that appears on the chart, supported by the EMA50 that carries the price from below.
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