After a weak reaction to the US Nonfarm Payrolls (NFP report), the price for gold traded at a new weekly high of $6655. The update to the Consumer Price Index(CPI) may help keep the precious metal in check as inflation is expected increase for the sixth consecutive month.
FUNDAMENTAL FORECAST OF GOLD PRICE: BULLISH
As the Russia/Ukraine war continues its rattle investor confidence, the price of gold seems to be poised to test the February high of $774. The bullish momentum underlying this precious metal appears to continue as the recent advance pushes Relative Strength Index(RSI) back into overbought territory.
The US CPI is likely to have an impact on the gold price in the future. Its headline reading will rise to 7.9% in February from 7.5% in February. This would be the highest reading since 1982. A bullish reaction to bullion could result as market participants seek to hedge against inflation.
The price of gold could continue to rise ahead of the Federal Reserve interest rates decision on March 16. This is even though Chairman Jerome Powell prepares US legislators for an imminent shift. Gold may trade at new yearly highs following clearing the February 2022 opening range.
With that being said, the risk appetite is likely to decline and the February high ($1974) may be tested. The Russia-Ukraine conflict appears to have prompted a flight to safety. Evidence of higher inflation could push the price for gold towards the September 2020 high ($1993), as the US CPI is expected increase for the sixth consecutive monthly month.
