- The bias is bullish as long as it is above the lower median line (lml).
- The new lower low reverses the upside scenario.
- BOJ could change the mood tomorrow.
The price of gold is trading in the green at $2,027 at the time of writing. The metal appears determined to hit new highs as the US dollar retreats. Greenback depreciation should help KSAU/USD buyers gain value.
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After the last rally, a small correction was very likely. On Friday, Prelim UoM Consumer Sentiment was better than expected, while Existing Home Sales and Prelim UoM Inflation Expectations disappointed.
Today, the US will release the leading CB index, which is expected to report a 0.3% decline after a 0.5% decline in the previous reporting period.
The Bank of Japan may shake up the markets tomorrow even if the BOJ interest rate remains at 0.10%. BOJ Press Conference, Monetary Policy Statement and BOJ Outlook Report could change the near-term sentiment.
Also, the New Zealand CPI and the US Richmond Manufacturing Index could have an impact.
Furthermore, the BOC and manufacturing and services data should move the rate on Wednesday, while the ECB and US Advance GDP are seen as high-impact events on Thursday.
Gold Price Technical Analysis: Flag Pattern
Technically, KSAU/USD found support at the lower middle line (LML) of the rising villa, and has now turned upside down. A pullback was expected, but the price registered only false breaks below the lower median line and the former low of $2,020, signaling that sellers were already exhausted.
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Price action has developed a flag pattern, which represents a bullish formation. The metal could develop a strong upward motion if it remained within the body of the rising fairy.
However, only a new higher high, bouncing and closing above the previous high of $2,032, confirms further growth. On the contrary, a new lower minimum can cancel the positive scenario and bring new shorts.
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