Gold climbed as much as 1,824 today where it has found resistance. Now, it has slipped lower and it's trading at 1,811 at the time of writing. After its amazing rally, a temporary retreat was natural.
Fundamentally, the yellow metal rallied after the US reported lower inflation. The CPI rose by 0.1% less than the 0.3% growth expected, while Core CPI surged by 0.2% versus the 0.3% growth estimate. XAU/USD rallied as FED is expected to deliver only a 50 bps hike tomorrow and a 50 bps or 25 bps in February if the inflation continues to drop.
Tomorrow, the UK inflation data could bring more volatility in Gold. The CPI may report a 10.9% growth while the Core CPI could register a 6.5% growth.
XAU/USD Natural Retreat!
Technically, XAU/USD dropped after reaching 1,824. Now, it challenges the 1,807 historical level (resistance turned into support). The broken downtrend line represents dynamic support.
As long as it stays above these levels, the bias remains bullish. Testing and retesting these levels could confirm the breakout.
XAU/USD Forecast!
The 1,807 - 1,800 area represents a demand zone. Testing and retesting these levels could announce a new upside momentum. False breakdowns through the support levels bring long opportunities.
Also, we'll have a new long opportunity if the rate makes a new higher high. A valid breakout through 1,824 activates further growth.
