Gold Technical Analysis – The market likes the benign inflation data

Fundamental
Overview

Gold is slowly edging
towards the key 2721 resistance as the softer than expected US inflation data
this week gave the necessary support to push into new highs.

Following the slightly
lower than expected US
Core CPI yesterday, we saw a big fall in real yields which should support gold
for further upside as inflation hysteria and the repricing in rate cuts
expectations might have peaked.

Gold
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that gold continues to trade inside the range between the 2600 support and the 2721 resistance. The price is now getting
closer to the resistance thanks to the soft US inflation figures this week.
That’s where we can expect the sellers to step in to position for a drop back
into the support. The buyers, on the other hand, will look for a break higher
to increase the bullish bets into a new all-time high.

Gold Technical Analysis
– 4 hour Timeframe

On the 4 hour chart, we can
see that the price eventually bounced from the middle of the range around the 2660
level as the buyers piled in to target the resistance and the US data gave the
boost to push the price to the upside. There’s not much else we can glean from this
timeframe as the sellers will wait for the price to come into the resistance,
while the buyers will look for a break higher.

Gold Technical Analysis
– 1 hour Timeframe

On the 1 hour chart, we can
see that we have now a minor upward trendline defining the current bullish
momentum on this timeframe. The buyers will likely continue to lean on the
trendline to keep pushing into new highs, while the sellers will look for a
break lower to position for a drop back into the support. The red lines define
the average daily range for today.

Upcoming
Catalysts

Today, we get the latest US Jobless Claims figures and the US Retail Sales
data.

Watch the video below

This article was written by Giuseppe Dellamotta at www.forexlive.com.