Gold Price Soaring as Buyers Hoping Cooled US Inflation Data

Gold Price Soaring as Buyers Hoping Cooled US Inflation Data

  • The bias remains bullish as long as it stays above the uptrend line.
  • The US inflation could bring sharp movements today.
  • After escaping from the flag pattern, the rate signaled a new upside movement.

The price of gold rallied in the short term, trading around $1,787 at the time of writing. The USD’s depreciation helped the yellow metal to approach new highs. 

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If the USD continues its depreciation, the XAU/USD could resume its growth. Fundamentally, the US data could really shake the markets today and could change the sentiment. The US is to release the inflation data, the economic figures could bring sharp movements on all markets and not only the XAU/USD.

The Consumer Price Index m/m is expected to report a 0.3% growth in November versus the 0.4% growth in October, CPI y/y may report a 7.3% growth less versus 7.7% in the previous reporting period, while Core CPI could register a 0.3% growth in the last month. 

Lower inflation could weaken the greenback and may lift the XAU/USD. On the contrary, higher inflation reported by the United States could boost the USD and could force the price of gold to drop. 

Also, tomorrow we’ll have the FOMC which represents a high-impact event. The Federal Reserve is expected to increase the Federal Funds rate by 50 bps, from 4.00% to 4.50%.  

Gold price technical analysis: Uptrend to resume

Gold price

From the technical point of view, the bias remains bullish as long as it stays above the ascending trendline. After escaping from the down channel pattern, XAU/USD signaled that the downside movement ended and that the buyers could try to take it higher. 

It retested the broken descending trendline before rallying. The ascending trendline and the $1,781 represent support levels. The $1,781 historical level represented a static resistance. Passing and stabilizing above it may signal further growth. 

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The weekly pivot point of $1,791 stands as a key resistance level. Technically, the bias remains bullish but it remains to see how it will react after the US inflation figures publication. The XAU/USD could register sharp movements in both directions. 

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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.