Skip to Content
News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

Free Trading Guides
Please try again

Live Webinar Events


Economic Calendar Events


Notify me about

Live Webinar Events
Economic Calendar Events






More View More
Gold Price Forecast: XAU/USD Battered in the Aftermath of US CPI

Gold Price Forecast: XAU/USD Battered in the Aftermath of US CPI

What's on this page

Gold Price (XAU/USD) Outlook:

How to Trade Gold
How to Trade Gold
Recommended by Tammy Da Costa
How to Trade Gold
Get My Guide

Gold Prices Sink as Higher Rate Expectations Drive USD Strength

Gold prices have extended losses in the aftermath of US CPI data, placing additional pressure on the precious metal. With the release of January’s inflation figures showing a slight reduction in Core CPI, price pressures remain elevated, renewing the potential for the Federal Reserve to continue to raise rates. Additionally, US retail sales have beaten estimates, supporting a stronger Dollar.

With the rate probabilities highlighting the projected rate hikes for the remainder of the 2023 FOMC meetings, only 0.64% expect interest rates to ease in December, while majority expect the Fed to continue hiking until the terminal rate rises to the range between 5 - 5.25%.

Table  Description automatically generated

Source: CME Fedwatch Tool

As Fed speakers reconfirm their commitment to achieving price stability by driving inflation back to the target of 2%, the recent data suggested that higher interest rates may be necessary for a longer duration of time.

Visit the DailyFX Educational Center to discover how monetary policy affects Forex trading

Because gold and silver are considered to be non-yielding assets, an uptick in the terminal rate to 5.25% does not bode well for the safe-haven metals.

In response to the adjustment in expectations, gold futures (GC1!) slumped, driving prices below the 50-day MA (moving average) holding as resistance at $1,863.

With a break of the bear flag on the four-hour chart assisting in fueling bearish momentum, pushing the RSI (relative strength index) toward oversold territory.

Gold Price Chart (GC1! Four-Hour)

Chart  Description automatically generated

Chart prepared by Tammy Da Costa using TradingView

As Gold futures erase an additional 1.00% in today’s session, the recent decline has sent XAU/USD to another zone of technical support around the key psychological level of $1,850.

With mid-point of the 2022 move resting at $1,848.6, a break of $1,830 could provide an additional catalyst for price action.

Gold Price Sentiment

Gold Bearish
Data provided by
of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily 1% -2% 1%
Weekly 33% -35% 13%
What does it mean for price action?
Get My Guide

Gold: Retail trader data shows 70.67% of traders are net-long with the ratio of traders long to short at 2.41 to 1. The number of traders net-long is 8.91% higher than yesterday and 6.34% higher from last week, while the number of traders net-short is 19.74% lower than yesterday and 18.66% 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.

Traders are further net-long than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger Gold-bearish contrarian trading bias.

--- Written by Tammy Da Costa, Analyst for

Contact and follow Tammy on Twitter: @Tams707

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.