Gold Price Stalls Bullishness Ahead of US Inflation

• The USD’s sell-off helped the XAU/USD to approach and reach new highs.
• The bias is bullish despite temporary retreats.
• A new higher high activates further growth.

The gold price is trading in the red at 1,881 at the time of writing. The USD’s minor appreciation forced the yellow metal to pare some gains.

Still, the upside pressure remains high after mixed US data was reported on Friday. As you already know, the Non-Farm Employment Change came in at 311K in February, above 224K expected but below 504K in January.

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The US Unemployment Rate increased unexpectedly from 3.4% to 3.6%, while Average Hourly Earnings reported only a 0.2% growth compared to the 0.3% growth estimated and after the 0.3% growth in the previous reporting period.

USD’s depreciation helped the XAU/USD to climb as much as 1,894 today, where it has found supply again. After its strong growth, a minor drop is natural. Fundamentally, the SVB collapse had an impact as well. Gold is bullish in the short term, but it remains to be seen how it will react after tomorrow’s US inflation figures.

The Consumer Price Index m/m is expected to report a 0.4% growth in February versus the 0.5% growth in January. CPI y/y could come in at 6.0%, while Core CPI could register a 0.4% growth. These are seen as high-impact events and should shake the markets. On Wednesday, the US retail sales data, PPI, and Core PPI could move the price.

Gold Price Technical Analysis: Buying momentum halts

Technically, the price of gold developed a strong leg higher after testing and retesting the lower median line (LML). It has registered a valid breakout through the median line (ml), and now it has reached the upper median line (UML), which acts as a dynamic resistance.

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As you can see on the hourly chart, the rate registered only false breakouts through this obstacle and above the weekly R1 (1,888), signaling exhausted buyers. In the short term, the XAU/USD tried to test and retest the 38.2% (1,871) retracement level.

The current sideways movement indicates a potential upside continuation. A valid breakout above the upper median line (ml), a new higher high activates further growth.

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