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  • Higher US inflation lifts gold from weekly lows.
  • XAU/USD unable to reach $1750, trims gains.

Gold prices are on a volatile session after bouncing from a one-week low to a two-day high in a few hours. On European hours, XAU/USD bottomed at $1723/oz, the lowest since April 4, and recently reached $1749. As of writing, the metal is hovering around $1740, up ten dollars for the day.

The sharp rebound started following US inflation data. The higher-than-expected reading weakened the US dollar and pushed US yields to the downside. The 10-year stands at 1.65%, far from the 1.70% high. In Wall Street, stocks are mixed.

Gold and the $1750/55 area

The upside move in gold eased when it approached the $1750/55 area that is a critical technical level. A consolidation clearly above would clear the way to further gains in the metal. Despite the recent pullback, the short-term outlook improved after the rally of more than $20 from the lows.

A decline back below $1735 could suggest more weakness ahead, while under $1730, a test of the daily low seems likely.

Technical levels

 

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