Gold Traders Eyeing US CPI This Week

Gold Turning Lower on MondayGold prices have come under heavy selling pressure on Monday with the futures market shedding around 1.3% so far. The decline comes against continued strength in the US Dollar on the back of last week’s stronger-than-forecast US jobs data. The headline NFP was seen printing 216k vs 168k expected, up from the 173k seen a month prior. With wages growth rising and the unemployment rate falling back, the data has added further weight to the view that 2024 Fed rate cuts will likely come a little later in the year than previously projected. Market pricing for a March rate cut has now fallen to around 60% from 70% prior to the meeting.US CPI in FocusLooking ahead this week, the main focus for traders will be on the latest set of US inflation figures due on Thursday. This data will be closely watched on the back of Friday’s figures and has the potential to drive a meaningful rally in USD if seen above forecasts. While the Fed has signalled its preference to begin easing this year, it has yet to give any clear signal on timing. As such, a strong figure tomorrow will see rate cut projections pushed further back in the year, allowing USD to rally near-term, bringing gold prices down. On the other hand, a fresh drop in CPI will likely see pricing for a March rate cut creeping higher, pulling USD lower near-term, allowing gold prices to rebound higher.Technical ViewsGoldThe latest test of the 2069.41 level has seen the market finding selling interest yet again. Price has now turned lower from the level and is testing the rising trend line from Q4 2023 lows. Below here, 1973.51 will be the main support to watch with bulls needing to defend the level to maintain a broader upside bias.