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Statistics on inflation in the U.S. will support the growth of gold prices

12 January 2023 50
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The price of gold continues its upward movement without any significant corrections. The main event for today will be the publication of the U.S. inflation statistics for December. The forecast assumes a price increase by 0.3%. It is quite possible that inflation will come out better than expected. Preliminary data from the University of Michigan hints at this.

According to a study by the University of Michigan, the annual inflation forecast released along with a report on overall consumer sentiment in December fell to 4.4% from 4.9% in November. The indicator was also reduced from a preliminary value of 4.6% two weeks ago. As a result, the forecast for U.S. consumer inflation fell to a low of 18 months. After the publication of positive inflation data, gold will try to take a jump up, with the first target being $1,900.

 

Analysts also expect gold to rise on inflation data.

"Further price cooling in December and lower bond yields would have been a desirable event for gold. From the technical picture, the bulls remain strong and the next key level of interest is at $1,900," said Lukman Otunuga, senior analyst at FXTM.

According to Kitco News data, Ole Hansen, head of commodity strategy at Saxo Bank, believes that while gold has a chance to rise above $1,900 per ounce before the weekend, he sees some risks of a decrease. While the momentum supports technical and speculative buying, activity in the ETF market from long-term investors remains moderate, which increases the short-term risk of a correction.

 

On the technical analysis, the picture has not changed much since the last forecast. Earlier, it was pointed at the RSI divergence on the daily timeframe, which suggests a reversal of prices for gold. This divergence remains, and there is still some space to rise to the trend line in the RSI.

 

 

Daily timeframe

 

On the hourly timeframe the upper border of the rising trend was drawn. The $1,900 level will be the upside target for gold after the publication of the inflation data. The stop-loss will be short $1,872, because in case of worse-than-expected inflation, the decrease in the price of gold could be strong and sharp. Therefore, it is better to set stop-loss and take profit levels in advance.

 

Rise in the price for gold:

Take profit – 1 900

Stop-loss – 1 872

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