GOLD – bulls take a breather under new multi-week high ahead of US economic data

Gold price edged lower from new 9-week high in early Thursday trading as positive impact from lower inflation in July started to fade while investors focus on US Producer Price Index data (due later today) which would provide more details about the Fed’s policy outlook.

Recent strong acceleration higher started to show signs of fatigue after a triple failure to register daily close above cracked Fibo barrier at $4416 (50% retracement of $4889/$3942 bear-leg), with stretched daily studies contributing to scenario.

On the other hand, near-term action holds above the top of daily Ichimoku cloud ($4358) for the third consecutive day that keeps bulls intact for renewed attacks.

Firm break of $4416 pivot to generate initial signal of bullish continuation and expose next targets at $4501 (200DMA) and $4527 (Fibo 61.8%).

Conversely, violation of cloud top would risk further easing, with extended dips to find firm ground at $4260 zone (Fibo 38.2% of $3960/$4449 / rising 10DMA) to mark a heathy correction before bulls regain control.

US PPI is expected to ease significantly in July that may provide fresh impetus to the metal’s price (US July PPI 4.9% f/c vs June 5.5%; Core July 4.2% f/c vs June 4.7%) on release at or below expectations.

Res: 4416; 4449; 4501; 4502
Sup: 4358; 4304; 4260; 4203