Gold price edges higher during the Asian session on Thursday and for now, seems to have snapped a two-day losing streak to a nearly three-week low, ar
ound the $1,906-$1,905 region touched the previous day. The XAU/USD currently trades just above the $1,910 area, though lacks bullish conviction. Moreover, the fundamental backdrop still seems tilted in favour of bearish traders and supports prospects for an extension of a two-week-old downtrend, from a one-month peak near the $1,953 zone touched on September 1.
In the absence of any big surprises from the United States consumer inflation figures, market participants now seem assured that the Federal Reserve will keep intereststeady at its policy meeting next week. This, in turn, keeps the US Dollar bulls on the defensive and lends some support to the Gold price. The US Bureau of Labor Statistics reported that the headline US Consumer Price Index surged to 3.7% on a yearly basis in August from 3.2% in July.
Moreover, the core CPI, which strips out volatile items like food and fuel, also met consensus estimates and rose 4.3% during the reported month. Nevertheless, the data pointed to still-sticky inflation and keeps hopes for one morerate hike move by the end of this year. In fact, the current market pricing indicates a more than 50% chance of a 25 basis points lift-off either in November or December.
Even from a technical perspective, this week's sustained break and acceptance below the very important 200-day Simple Moving Average suggests that the path of least resistance for theis to the downside. Hence, any subsequent move up might still be seen as a selling opportunity and remain capped. Bearish traders, however, might wait for some follow-through selling below the $1,900 psychological mark before positioning for any further losses.
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