- The price of Gold rallies as the DXY is trading in the red.
- XAU/USD could be attracted by the median line (ml) as long as it stays above the lower median line (lml).
- Failing to stay below the range’s support may announce an upside breakout.
Our gold forecast sees the price of the yellow metal improve today as the Dollar Index slipped lower after its rally.
Technically, the yellow metal maintains a bullish bias after failing to activate a larger downside movement. XAU/USD is traded at 1,824.54 at the time of writing, right below today’s high of 1,825.57. The price registered a 1.09% growth from yesterday’s low of 1,805.84 to today’s high.
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The price of gold continues to be traded higher as the inflationary pressure is high. Surprisingly or not, XAU/USD edges higher even if the Dollar Index could resume its upwards movement.
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Today, the United Kingdom Consumer Price Index reported a 5.4% growth in December versus 5.2% expected, while the Core CPI rose by 4.2% versus 3.9% expected. Higher inflation reported by the UK could lift the price of gold.
As you already know, Gold is used as a hedge to inflation. On the other hand, the Canadian CPI reported a 0.1% drop as expected, while the Core CPI registered a 0.0% growth.
The XAU/USD is located in the buyers territory, so a minor decline could help the buyers to catch a new leg higher. It remains to see how it will react after the US Building Permits and Housing Starts indicators reported better than expected data.
Gold Forecast: Price Technical Analysis – Bullish Momentum
XAU/USD found strong support on the outside sliding line of the ascending pitchfork and now it has jumped far above the lower median line (ml). It has ignored the daily R1 (1,822.46) level. Staying above it may signal further growth at least towards 1,828.09 static resistance.
Failing to stabilize below the 1,814.78 range’s support could announce an upside breakout. Technically, as long as it stays inside the ascending pitchfork’s body, above the lower median line (lml).
The median line (ml) acts as a magnet and it could attract the price as long as it’s located inside of this technical tool.
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