Gold moves sideways in the short term, so we'll have to wait for the price to escape from the current range before considering going long or short. The yellow metal rallied after the US inflation was released on Friday. As you already know, XAU/USD is used as a hedge against inflation, that's why the price turned to the upside.
The US Consumer Price Index registered a 0.8% growth in November versus a 0.7% growth expected, while the Core CPI came in line with expectations, reporting a 0.5% increase. Tomorrow, the PPI is expected to register a 0.5% rise in November, while the Core PPI may report a 0.4% growth.
Gold could register sharp movements during the week. The FOMC meeting on Wednesday as well as the ECB, BOE, and SNB meetings on Thursday could really shake the markets.
XAU/USD breakout validated
Gold has finally escaped from the down channel's body and now it tries to extend its rally. It has retested the broken downtrend line and the weekly pivot point (1,782.16). The weekly R1 (1,793.95) and the 1,794.70 are seen as immediate upside obstacles. A valid breakout through these levels could open the door for a larger upwards movement.
After its failure to come back down towards the 1,761.94 static support, Gold is expected to challenge 1,794.70 static resistance. Minor consolidation here above the 1,782.16 pivot point could announce further growth.
XAU/USD prediction
Jumping, closing, and stabilizing above 1,794.70 could confirm an upside continuation. This scenario may bring new long opportunities.
