#XAUUSD @ 1721.79 Gold prices have faced a sell-off amid lower consensus for US Inflation. (Pivot Orderbook analysis)

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• Gold prices have faced a sell-off amid lower consensus for US Inflation.
• A back-to-back decline in the inflation rate will bolster the case of exhaustion in the price pressures.
• The precious metal is oscillating in a volatility contraction pattern ahead of US CPI.

The pair currently trades last at 1721.79.

The previous day high was 1735.17 while the previous day low was 1712.02. The daily 38.2% Fib levels comes at 1726.33, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1720.86, expected to provide support.

Gold price (XAU/USD) has delivered a downside break of the consolidation formed in a narrow range of $1,720.89-1,723.08 in the Asian session. The precious metal is declining after printing a fresh two-week high around $1,735.00 on Monday. The gold prices are witnessing the heat amid lower consensus for US inflation.

Investors should be aware of the fact that the precious metal is considered an inflation-hedged tool and a decline in the US inflation forecast has forced the market participants to trim their longs from the gold counter. The estimates for the headline US Consumer Price Index (CPI) that inculcates oil and food prices are at 8.1% significantly lower than the former figure of 8.5%.

A back-to-back decline in the inflation rate is sufficient to bolster the case of exhaustion in the price pressures. While, the core US CPI is seen higher at 6%, 10 basis points (bps) above from the prior release.

Meanwhile, the US dollar index (DXY) is displaying a lackluster performance. The asset is oscillating in a narrow range of 108.14-108.27 range as investors are awaiting the release of the US inflation for an informed decision.

On an hourly scale, the gold prices are auctioning in a Symmetrical Triangle chart pattern, which advocates a volatility contraction ahead. However, a break of the same on either side results in wider ticks and heavy volume.

The 50-period Exponential Moving Average (EMA) at $1,722.00 is overlapping with the gold prices, which indicates an ongoing consolidation in the counter.

While, the Relative Strength Index (RSI) (14) has slipped into the 40.00-60.00 range, which signals that the bullish bias has been trimmed for now.

Technical Levels: Supports and Resistances

XAUUSD currently trading at 1721.16 at the time of writing. Pair opened at 1724.58 and is trading with a change of -0.2 % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 1732.03, 50 SMA 1742.21, 100 SMA @ 1793.94 and 200 SMA @ 1833.26.

The previous day high was 1735.17 while the previous day low was 1712.02. The daily 38.2% Fib levels comes at 1726.33, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1720.86, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 1712.68, 1700.77, 1689.53
• Pivot resistance is noted at 1735.83, 1747.07, 1758.98

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