The metal posted the fourth consecutive week in a row on Friday

Gold prices look steady around $1,900 on Monday, slightly off January highs seen around $1,912 last week. The precious metal keeps climbing higher, having posted the fourth consecutive week in a row on Friday. The bullion derives support from dollar weakness and its status as a store of value amid increasing inflation expectations.

Of note, the data on Friday showed that the US core PCE Price Index came in at 3.1% versus 2.9% expected. As such, the release helped propel the precious metal higher. As a reminder, this is the Fed’s preferred inflation gauge that arrived considerably above the central bank’s nominal 2% target.  

Despite gold prices are holding closer to multi-month tops, the market lacks any follow-through buying. The bullion was last seen trading around the $1,904-05 region, nearly unchanged for the day. However, the data did little to shift Fed rate hike expectations as the regulator continues to stubbornly express a dovish view that the recent spike in prices should prove temporary.

Still, a weaker greenback continues to benefit the dollar-denominated commodity while the underlying bullish sentiment in the financial markets keeps a lid on any further gains for the safe-haven yellow metal.

In the short term, gold could see a pullback or even a period of consolidation before advancing higher. The daily RSI now looks directionless in the overbought territory, suggesting further gains could be limited in the near term. On the downside, the key immediate support is represented by the $1,880 area, followed by the ascending 20-DMA that now arrives at $1,855.

Meanwhile, a daily close above the $1,900 figure would be a confirmation of a steady sentiment surrounding the bullion and could pave the way to further gains. Once above $1,912, the prices would target the $1,930 region, followed by this year’s tops around $1,960.


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