• Gold prices have slipped to near $1,660.00 after the termination of a less-confident pullback.
• The risk-off impulse has rebounded firmly as 10-year yields have climbed to 4%.
• The absence of exhaustion in the core CPI figures is sufficient for the Fed to tighten policy at current pace.

Gold price (XAU/USD) has picked significant offers after a short-lived pullback to near $1,673.77 in the Tokyo session. The precious metal has slipped to near $1,660.00 as the US dollar index (DXY) has refreshed its weekly high at 113.40. The DXY has defended the downside break of 113.00 as the risk-off impulse has rebounded firmly.

The S&P500 futures have turned red again after attempting to shift into bullish territory. It seems that investors have capitalized on the pullback move to build fresh shorts. Meanwhile, 10-year US Treasury yields have jumped to near 4.0% and are expected to recapture the critical high of 4.02% ahead of the US Consumer Price Index (CPI) data.

As per the projections, the headline US CPI will trim to 8.1% vs. the prior release of 8.3% while the core CPI that excludes the impact of oil and food prices will improve to 6.5% from the former figure of 6.3%. The absence of exhaustion in the core CPI figures is sufficient for the Federal Reserve (Fed) to tighten its policy further at the current pace.

Gold technical analysis

Gold prices have sensed selling pressure from the 50% Fibonacci retracement placed at $1,672.61 and are declining towards the 61.8% Fibo retracement at $1,658.90 plotted on an hourly scale. A death cross, represented by the 50-and 200-period Exponential Moving Averages (EMAs) at around $1,690.00, adds to the downside filters.

Adding to that, the Relative Strength Index (RSI) (14) has shifted into the bearish range of 20.00-40.00, which indicates more weakness ahead.

Gold hourly chart