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Gold Price Analysis: Bears protecting key resistance, $1,900

Gold prices  pushed back above USD1,900/oz early in the trading session but failed to hold those levels amid a stronger USD.

The price of gold on Tuesday was a touch lower with XAU/USD sinking some 0.3% by the closing bell on Wall Street after falling from a high of $1,903.93 to a low of $1,883.78.

Investors tread water ahead of an influx of what is to be expected market-moving events, from central banks to US inflation data, over the coming days.  

Further rises in inflation could raise concerns that the Fed will start to contemplate tighter monetary conditions, with a reduction in bond purchases the likely first move.

In the market lull, forex volatility hit its lowest in a year and the US dollar was virtually sidelined as markets got set for Super Thursday with the European Central Bank  and US Consumer Price Index.

Traders on Tuesday sent longer-term US Treasury yields to their lowest in more than a month after a report showed small business owners less confidence, and narrowing the spread of a closely watched part of the yield curve.  

The risk mood is also dull which is supportive of the greenback. The S&P 500, for instance, has been showing little evidence of a convincing recovery and breakout to fresh highs since it fell hard in the middle of last month when precious metal  prices also experienced a setback and the greenback recovered over 1% in the DXY.  

Meanwhile, Friday’s weaker-than-expected Nonfarm Payrolls numbers,  which has eased concerns about an early tapering of the Federal Reserve’s monetary stimulus, should keep the US dollar capped  into the Fed which would be expected to keep the price of gold near to the recent highs in the $1,900s.  

Gold technical analysis

Technically, the price is testing meanwhile 4-hour support would be expected to hold into  the US CPI data on Thursday  above bullish daily  10 and 20 EMAs.

However, if the M-formation on the daily chart does hold at the neckline, with the  price stuck below the neckline resistance of 1,900, a case for w restest of daily dynamic support will be on the cards.    

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