- The bias is bullish despite temporary retreats.
- The US data should bring high action today.
- Taking out the R2 activates further growth.
The gold price extended its recovery rally as the US dollar slipped further. The precious metal is trading at $1,868 at the time of writing.
The bias is bullish in the short term. However, we cannot rule out the probability of a downside correction after such an impressive growth.
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The US Final Wholesale Inventories came in as expected yesterday, while the NFIB Small Business Index was disappointing. Today, the fundamentals should move the price as the US will release high-impact data.
The PPI is expected to report a 0.3% growth versus the 0.7% in the previous reporting period, while the Core PPI may report a 0.2% growth. Furthermore, the FOMC Meeting Minutes could provide stimulus to the markets so the volatility could be high. Positive US data and hawkish FED should lift the greenback, so XAU/USD could retreat. Tomorrow, the US inflation data should bring sharp movements.
The CPI m/m is expected to report a 0.3% growth. CPI y/y may register a 3.6% growth, while Core CPI could report a 0.3% growth again.
Gold Price Technical Analysis: Bulls Gaining
XAU/USD tested the $1,854 level, trying to accumulate more bullish energy before jumping higher. Now, it has passed above the upper median line (ULM), representing a dynamic resistance, and reached the weekly R2 of $1,869.
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Validating the breakout through the upper median line and taking out the R2 activates an upside continuation. Its failure to stabilize below the lower median line (LML) signaled a new leg higher. Gold is strongly bullish, so more gains are natural despite temporary retreats.
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