Reversal in gold prices following a string of week-long gains

Economic news affecting gold movements

Gold experienced a string of highs last week mostly driven by the weakening US Dollar and investor assessment of Federal Reserve's monetary policy in light of inflation data.

During this period, the US Consumer Price Index (CPI) displayed a slowdown in annual growth, reaching 3% compared to the previous reading of 4%. Similarly, the core CPI, which excludes food and energy, decelerated to 4.8% from the previous reading of 5.3%.

These figures further solidified expectations of an approaching end to the Federal Reserve's tightening cycle, with the anticipated rate hike in the upcoming meeting likely to be the last in the series.

Mary Daly, a member of the Federal Reserve and president of the Federal Reserve Bank of San Francisco, expressed her belief that it is premature for the Fed to declare success in achieving targeted inflation levels. Despite the positive consumer price data, she remains committed to lowering inflation to 2%.

Christopher Waller, another Federal Reserve member, advocated for two interest rate increases this year to bring inflation in line with the bank's targets, with the first increase expected at the upcoming meeting. As for gold trading, the precious metal began the week's first session with a slight decline, hovering around $1952 per ounce.

The most important technical and pivotal levels

After prices rose of $1964.00 and failed to surpass it, the yellow metal retreated and is now trading below the level of $1950. It is likely that gold will extend its decline to test the support level of $1930, which, if broken, may extend to $1900.

If prices surpass strong resistance level of $1964, this may contribute to further rise to test the stronger resistance level of $1983, approaching $2000.