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Gold falls, US dollar recovers on economic figures

Gold falls, US dollar recovers on economic figures
(Photo credit: Arabianeye - Reuters)

By: Mahmoud Gamal

Mubasher: The announcement of growth in US consumer prices led to profit gains by gold traders and gave the US a space to recover.

The US trade department said that the consumer prices index (CPI) for all items rose 0.6% in January, after adding 0.3% in December, the biggest hike since February 2013.

The price of US gold futures dropped 0.46%, to the mark of $1,235.85 an ounce.

The US CPI index's growth forms probabilities that the US Federal Reserve may increase interest rates, leading the gold to decline to the level of $1,235, technical analyst Alaa Aldin Farhan told Mubasher.

Farhan added that gold will experience an important resistance level at $1,245, and surpassing it will qualify it to $1,300 per ounce. However, this depends on the political instability of the US after the resignation of the national security adviser, Michael Flynn.

If gold fails to stay stable above $1,230, it will keep falling to $1,213 and $1,216, after which the $1,200 level will be experienced again, Farhan noted.

The US dollar index rose 0.44% to 100.89 points against a basket of currencies.

Technical analyst Tamer Al Mahmoud noted that the US dollar index does not currently face any weak indicators.

The analyst advised traders to expand their purchasing positions amid technical rising targets.