GOLD – bears take a breather after 2% drop, traders eye US inflation data for fresh signals

Gold edged higher in early Friday trading on a partial profit-taking after Thursday’s 2% drop, as traders await release of key US inflation data for fresh direction signals.

Gold was deflated by sharp rise in oil prices and under pressure from growing expectations for Fed rate hike in September policy meeting, with today’s inflation data to give the final signal to the policymakers ahead of next week’s meeting.

Bears were repeatedly contained by significant Fibo support at $4319 (50% retracement of $3942/$4697 upleg), although pressure on support remains.

Current conditions with high risk of war escalation and further rise of oil prices, maintain pressure on gold that may result in final break of $4319 pivot (will also complete bearish failure swing pattern and signal bearish continuation) to expose targets at $4268 (daily cloud top) and $4230 (Fibo 61.8%).

Daily studies are predominantly bearish, keeping strong negative momentum, with multiple MA bear-crosses, while daily Ichimoku cloud is thinning and twists next week that would be also magnetic.

Only bounce and close above $4400 zone (10DMA / broken Fibo 38.2%) would sideline bears and open way for stronger recovery.

Res: 4364; 4388; 4408; 4461
Sup: 4319; 4268; 4230; 4200