VOT Research Desk
As a result, it looks that purchasers will take another pause on Friday as they prepare for the next major surge higher.
Following Thursday’s massively turbulent trading, the market remained cautiously hopeful.
The Consumer Price Index in the United States increased 7.7% year on year, down from 8.2% in September and well below the consensus prediction of 8.0%. The CPI increased by 0.4% month on month, down from 0.6% in September, while core statistics increased by 0.3%, less than the 0.5% predicted.
The highly anticipated US data report spurred a major risk rally due to heightened forecasts of a lesser rate hike by the US Federal Reserve (Fed) in December.
The US Dollar was significantly sold off ahead of the announcement of the weaker US Consumer Price Index (CPI), supporting the gold price. The US Dollar was heavily sold off ahead of the release of the softer US Consumer Price Index (CPI), propping up gold prices to levels not seen since August 26.
The American Dollar is still reeling from Thursday’s massive blow, allowing gold bulls to take a breather.
Data on American Consumer Sentiment is the focus of attention.
After the key US CPI statistics were released, traders’ attention turned to the University of Michigan’s (UoM) Consumer Sentiment and Inflation Expectations data amid a market that was weak due to the holiday season.
In the United States, Wall Street will be open but the government bond market will be closed in respect of Veterans Day. The movements in the price of gold may be magnified if there is insufficient liquidity paired with end-of-week flows.
Gold Technical Analysis
On the daily period, the price of gold is exhibiting a short so-called bull flag formation while taking cues from recent price movement.
A further move upward into the $1,800 level cannot thus be counted out, especially after the shiny metal closed over the crucial $1,750 threshold on Thursday.
Near the $1,800 mark, the 200-Daily Moving Average (DMA) is in bearish alignment.
The positive 14-day Relative Strength Index (RSI) continues to linger below the overbought region, indicating that there is still more upward potential.
Gold’s price may correct in the direction of $1,740 before resuming its upward trend. Below this level, the October high of $1,730 will once again come into play.
