Gold Price Back Above $1,879, All Eyes on US CPI
- The XAU/USD is still bullish. The US inflation data could be decisive today.
- A new higher high activates further growth.
- Testing and retesting the near-term support levels could announce a new bullish momentum.
The gold price dropped a little yesterday. However, now it has turned to the upside and seems determined to approach new highs as the bias remains broadly bullish.
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The USD is still in a major corrective phase. That’s why the XAU/USD could resume its uptrend. Fundamentally, the yellow metal slipped lower in the short term, probably because the Australian CPI reported a 7.3% growth beating the 7.2% growth expected and the 6.9% growth in the previous reporting period.
Still, the price turned to the upside as the US will release its inflation figures later today. The traders expected the Consumer Price Index to report a 0.1% drop in December after the 0.1% growth in November, while the CPI y/y could be reported at 6.5%.
In addition, the Core CPI may report a 0.3% growth, while the Unemployment Claims indicator could jump from 204K to 216K in the previous week. Tomorrow, the UK Gross Domestic Product and the US Prelim UoM Consumer Sentiment could also greatly impact the XAU/USD.
Gold price technical analysis: Aiming to break $1,886
Technically, the XAU/USD found support on the descending pitchfork’s upper median line (UML). Now it has jumped above the 150% Fibonacci line. This represented a dynamic resistance, so validating its breakout could announce further growth towards the $1,886 former high.
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Testing the broken line or the 1,879 historical level could result in new upside momentum. A new higher high, taking out the 1,886, signals further growth towards the warning line of the descending pitchfork.
Its false breakdown with great separation below the $1,871 announced exhausted sellers and indicated strong upside pressure. The XAU/USD could register sharp movements around the US inflation data in both directions.
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