Gold price is under pressure as investors focus on US Treasury yields ahead of the consumer inflation data. The metal is trading at $1,692, which is 20% below its all-time high of $2,077.
Gold news: Gold has been under pressure recently as investors start pricing-in high interest rates in the United States after the Senate passed the record $1.9 trillion stimulus package. In the past, the price of gold has underperformed during a high interest rate environment.
Therefore, since there is no major scheduled economic data from the United States today, investors will focus on the consumer price index (CPI) data scheduled for tomorrow. Economists expect the data to show that consumer prices increased by 1.7% in February as the price of crude oil rose.
The previous $900 billion stimulus package helped. Therefore, if the CPI figures are better than estimated, the gold price will continue to languish.
Today, gold price is also suffering because of the resugent Bitcoin price. The BTC/USD price rose to above $53,000, meaning that it has gained by more than 20% in the past few days.
Gold and Bitcoin price divergence
Gold price forecast
On the daily chart, we see that the gold price has been on a strong downward trend. This performance accelerated when the price moved below $1,780, which was the lower side of the descending channel.
Today, the price downward trend is supported by the 25-period and 15-period exponential moving averages (EMA) while the Relative Strength Index (RSI) has continued to drop. Therefore, the pair may continue falling as bears target the next support at $1,600, which is 5% below the current level.
Gold technical chart