Gold Price Forecast: $4,500 Caps Momentum Ahead of CPI

Gold Technical Analysis

The gold market finds itself bouncing around the $4,450 region, just above the 50-day EMA and just below the $4,500 level. This is an area that I am very interested in at the moment, as it has been important.

This is a market that has a lot of different things going on at the same time, not the least of which would be geopolitical risk and oil causing a lot of potential inflationary concerns.

There are several things coming up in the next few days that could have an influence on gold, not the least of which would be CPI on Friday, as it could influence the Federal Reserve next Wednesday and the expectations around a rate hike.

The Safety Bid Is Still Out There With the War

The ECB is expected to raise rates by a quarter basis point this week. And with that, the question is, will higher interest rates continue to keep gold somewhat suppressed?

The safety bid is still out there with the war, but ironically, the war is also causing inflation and inflation expectations that are keeping the metals suppressed. So, you have a situation where gold doesn’t have anywhere to go.

What we really will be watching for, in my opinion, is any type of divergence in central bank behavior. If one central bank sounds a little bit more dovish than the other, that can influence the US dollar, which has a significant influence on gold.

Right now, it looks very neutral, and that does make a certain amount of sense because, with all of this information coming out, and of course, the errant Middle East headline, this is a tight market to be trading.

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