Home Gold Price Forms New Distribution Pattern, Ahead of US Inflation

Gold Price Forms New Distribution Pattern, Ahead of US Inflation

  • XAU/USD maintains a bearish bias as long as it stays below the upper median line (UML).
  • The median line (ml) could attract the price.
  • Tomorrow, the US inflation data should bring sharp movements.

The gold price is trading in the red at $1,858 at the time of writing. The bias remains bearish in the short term as the USD remains strong.

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As you already know from my analyses, the yellow metal could drop when the US dollar gains. Fundamentally, the XAU/USD signaled a larger downside movement after the US NFP, ISM Services PMI, and the Unemployment Rate came in better than expected on February 3, 2023.

On Friday, the US Dollar received a helping hand from the US Prelim UoM Consumer Sentiment, which came in 66.4 points above the 65.0 points expected. USD’s rally forced the XAU/USD to drop again.

Today, Switzerland’s Consumer Price Index reported a 0.6% growth versus the 0.5% growth expected. Also, the EU Economic Forecasts had an impact on Gold. Still, the US inflation data represents the week’s most important event.

Tomorrow, the US economic figures could shake the markets. The CPI m/m is expected to report a 0.5% growth in January. CPI y/y could drop from 6.5% to 6.2%, while the Core CPI may report a 0.4% growth. Higher inflation should force the XAU/USD to drop as the FED needs to continue hiking the rates in the next monetary policy meetings.

Gold price technical analysis: Bearish bias

Gold price

Technically, the price retested the descending pitchfork’s upper median line (UML), representing a dynamic resistance. As long as it stays below it, the XAU/USD should approach new lows.

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The 38.2% ($1,869) and the pivot point of 1,869 represent upside obstacles. The former low of $1,852 stands as the first target. The S1 of $1,848 and the 50% ($1,843) also represent near-term downside targets. Still, as long as it stays under the upper median line (UML), the price could be attracted by the median line (ML) again. From a technical point of view, the median line acts as a magnet.

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Olimpiu Tuns

Olimpiu Tuns

Olimpiu Tuns graduated with a Master in Business Administration and is a seasoned Market Analyst / Trader / Trainer with 10 years of experience in the financial markets having expertise in Forex, Commodities, Index, Cryptocurrencies, and Stocks. He worked as a Market Analyst for three major brokerage companies, as a prop trader, and as a contributor/content creator for news portals and educational platforms.