- KSAU/USD seems determined to move back higher as long as it stays above the lower midline.
- US inflation data should bring sharp developments tomorrow.
- Only the new lower low cancels out the higher rise.
The price of gold is trading in the green at $2,034 at the time of writing. The metal appears determined to hit new highs as the US dollar turns lower. The dollar selloff should help XAU/USD pull back higher and erase some of the recent declines.
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Yesterday, the US trade balance and RCM/TIPP economic optimism were better than expected, while Canada’s trade balance and construction permits indicators reported poor data.
Today, Australia’s CPI rose 4.3%, down from an estimated 4.4% growth and well below the 4.9% growth in the previous reporting period. Later, BOE Gov. Bailey Speaks, and US final wholesale inventories could trigger some moves.
Still, traders are waiting for US inflation data. Consumer Price Index, CPI y/y, and Core CPI data will be released tomorrow.
Higher inflation could punish the price of gold and boost the dollar in the short term. Moreover, US PPI, Core PPI, UK GPD and Chinese inflation figures could move the rate on Friday.
Gold Price Technical Analysis: Bullish Momentum
Technically, the yellow metal causes the bad line of the former channel. The price found strong support at the lower middle line (LML) of the ascending forks, and is now trying to jump higher again. Its failure to break the lower middle line (LML) revealed the exhaustion of sellers and that the correction phase may be over.
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The downtrend line, $2,050, and the midline (ml) of the ascending forks represent potential upside targets. KSAU/USD could develop a wider bounce as long as it remains above the lower median line (LML).
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