Gold extended upside movement on Friday, increasing the price of yellow metal to more than $1210 an ounce ahead of some key economic releases. The technical bias remains bullish due to a Higher High and Higher Low in the recent wave.
As of this writing, the precious metal is being traded near $1213. A hurdle may be noted around $1224, the 50% fib level ahead of $1232, the swing high of the last major upside rally and then $1244, the 61.8% fib level as demonstrated in the following daily chart.
On the downside, the yellow metal is likely to find a support around $1205, the 38.2% fib level ahead of $1181, the 23.6% fib level and then $1142, the swing low of the last major dip. The technical bias will remain bullish as long as the $1170 support area is intact.
The US Bureau of Statistics is due to release the Consumer Price Index (CPI) reading today which is considered a main gauge for inflation. According to the average forecast of different economists, the CPI remained -0.1% in April as compared to the same reading in the same month of the year before. Generally speaking, higher CPI reading is considered positive for the economy thus a better than expected actual outcome will be seen as bearish for gold and vice versa.
Considering the overall technical and fundamental outlook, selling the precious metal around current levels appears to be a good strategy if we get a bearish pin bar on daily chart. A tight stop should be kept at $1232 as described above.
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