Gold Shrugs Off Inflation, Aims Higher

Gold erases early loss despite hot US CPI data.  It hit a high of $2942 yesterday and currently trading around $2891.

In January 2025, the CPI for the prices paid by consumers rose by 0.5% seasonally adjusted. The inflation rate for the past year reached 3%, which was a tad above the 2.9% recorded in December. The core CPI, excluding prices of food and gasoline, rose by 0.4% too. The S&P 500 was predicted to drop if the CPI rose by more than 0.4%. This report confirms the Federal Reserve's cautious policy of loosening the cost of borrowing. The CPI in December 2024 rose by 0.4%, and year over year, it had risen by 2.9%. The next CPI release, for February 2025, will be published on March 12, 2025.

Major economic data to be watched today - US PPI and US initial jobless claims.

Rate Pause Sentiments Climb

According to the CME Fed Watch tool, the chances of a rate pause on the Mar 19th, 2025 meeting have increased to 97.50% up from 84% a week ago.

Technical Analysis: Key Levels and Trading Strategy

Gold prices are holding above the short-term moving averages 34 EMA and 55 EMA and long-term moving averages (200 EMA) in the 4-hour chart. Immediate support is at $2875 and a break below this level will drag the yellow metal to $2860/$2850/$2830/$2800/$2770/$2740. The near-term resistance is at $2920, with potential price targets at $2945/$2957/$3000. It is good to buy on dips around $2850 with a stop-loss at $2830 for a target price of $2955.