Key Highlights

  • Gold price gained traction in the past few days and broke the $1,285 resistance against the US Dollar.
  • There is a crucial bullish trend line formed with support at $1,288 on the 4-hours chart of XAU/USD.
  • The US PPI in Dec 2018 declined 0.2% (MoM), more than the -0.1% forecast.
  • The UK CPI report for Dec 2018 will be released today, which could rise 2.1% (YoY).

Gold Price Technical Analysis

In the past few days, there was a steady rise in gold price above the $1,280 resistance against the US Dollar. The price even traded close to the $1,300 level before starting a consolidation pattern.

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The 4-hour chart of XAU/USD indicates that the price started a major upward move from the $1,225 swing low. Buyers gained strength and the price settled above the $1,260 and $1,280 resistance levels.

The recent uptrend was such that the price is now trading well above the $1,280 support, the 100 simple moving average (red, 4-hours), and the 200 simple moving average (green, 4-hours).

The price recently traded close to the $1,300 level, which acted as a resistance. At the moment, the price is consolidating with corrective moves. On the downside, there is a crucial bullish trend line formed with support at $1,288 on the 4-hours chart of XAU/USD.

Should there be a break below the trend line, the next support is $1,280 and the 100 SMA. On the flip side, a successful break and close above $1,300 may spark more gains towards the $1,308 and $1,315 levels in the coming days.

Recently, the US Producer Price Index report for Dec 2018 was released by the Bureau of Labor statistics, Department of Labor. The market was looking for a 0.1% decline in the PPI in Dec 2018 compared with the previous month.

However, the result was disappointing as there was 0.2% decline in the PPI. The yearly change was +2.5%, similar to the forecast and the last reading.

Overall, the US Dollar remained in a bearish zone, which may help gold in the near term.

Economic Releases to Watch Today

  • German Consumer Price Index for Dec 2018 (YoY) – Forecast +1.7%, versus +1.7% previous.
  • German Consumer Price Index for Dec 2018 (MoM) – Forecast +0.1%, versus +0.1% previous.
  • UK Consumer Price Index Dec 2018 (YoY) – Forecast +2.1%, versus +2.3% previous.
  • UK Core Consumer Price Index Dec 2018 (YoY) – Forecast +1.8%, versus +1.8% previous.
  • UK Producer Price Index Dec 2018 (YoY) – Forecast +2.4%, versus +2.4% previous.
  • US Import Price Index Dec 2018 (MoM) – Forecast -1.3%, versus -1.6% previous.
  • US Export Price Index Dec 2018 (MoM) – Forecast -0.6%, versus -0.9% previous.

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