Gold remains elevated by weak dollar; US inflation data eyed for fresh signals
Spot gold is consolidating under three-month high ($1845) taking a breather after last week’s 3.5% advance (the biggest one-week rally since late July 2020).
Weaker dollar after downbeat US jobs data keeps the metal’s price underpinned.
Weekly close above psychological $1800 barrier generated fresh bullish signal, which was boosted by repeated daily close above next pivotal barrier at $1828 (Fibo 38.2% of $2074/$1676).
The yellow metal’s current price action is currently holding around the mid-point of thick weekly Ichimoku cloud, with long upper shadows of Fri/Mon daily candles, generating initial signals of stall, but long tail on Tuesday’s candle suggest that the downside is so far protected by strong bids.
Traders await US inflation data due on Wednesday, which are eyed for fresh signals, as consumer prices figures are expected to give more hints about Fed’s next steps.
Overbought daily studies warn of further easing, with initial support provided by rising 5DMA / today’s low ($1820/17) and $1800 level (reinforced by rising 10DMA) which needs to hold extended dips and keep bulls in play for attack at 200DMA ($1851) and Feb 10 lower top ($1855) and possible extension towards $1875 lower platform / 50% retracement of $2074/$1676 descend.
Res: 1845; 1851; 1855; 1875
Sup: 1820; 1800; 1796; 1786