Daily Analysis XAUUSD - 14 June 2023

The release of soft consumer inflation figures from the United States reinforces market expectations of a temporary halt in the Federal Reserve's rate-hiking cycle, which lends some support to the price of gold. In May, the Consumer Price Index (CPI) showed minimal growth, with the year-on-year rate slowing to its lowest level since March 2021. However, the annual inflation rate of 4.0% remains twice the Fed's target, keeping hopes alive for further tightening of monetary policy.

The markets are still pricing in the possibility of an additional 25 basis point increase at the July Federal Open Market Committee (FOMC) meeting, leading to a sharp rise in US Treasury bond yields. This acts as a tailwind for the US Dollar and a headwind for Gold, which lacks yield. However, cautious trading prevails as market participants wait for key central bank events.

The Fed's policy decision is expected to be announced later in the US session, and it is widely anticipated that the Fed will maintain its current stance. Traders will pay close attention to Fed Chair Jerome Powell's comments during the post-meeting press conference for any indications of future rate hikes. The focus will then shift to the European Central Bank (ECB) policy meeting on Thursday, followed by the Bank of Japan's (BoJ) monetary policy update on Friday. In the meantime, if risk sentiment remains weak, it may continue to support the safe-haven appeal of gold.

Gold prices have remained within the same range for the past month. The outcome of today's Federal Reserve (FED) meeting could potentially determine the future direction of the precious metal. On the 4-hour chart, the 200-day moving average (200MA) stands as a significant resistance level, while on the daily chart, the 100-day moving average (100MA) is providing support for the price of gold.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
2000	1982	1962	1937	1880	1800