According to the US Department of Labor, the consumer price index (CPI) in February showed an annual increase of 7.9% (against 7.5% in January and economists' forecast of growth by 7.8%), which is the most significant annual increase since January 1982 of the year. The Fed is likely to tighten monetary policy this year not as aggressively as expected, given the impact of events in Ukraine on the global economy.
At the beginning of today's European session, the XAU/USD pair is trading near the important short-term support level of 1972.00, providing a good opportunity to increase long positions. As you know, gold is very sensitive to changes in the monetary policy of the world's leading central banks, especially the Fed. When it tightens, the quotes of the national currency (under normal conditions), as a rule, grow, while the price of gold falls.
However, geopolitical uncertainty and accelerating inflation around the world increase the demand for gold, which is a popular defensive asset, creating preconditions for further growth of its quotations.
Therefore, it is considered advisable to look for opportunities for the best entry into long positions. The current correction is one of them.
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