Gold prices slipped as oil-driven inflation fears pushed September Fed hike odds above 50%, lifting Treasury yields and the dollar ahead of CPI.
For more than a month, sellers have repeatedly pressed the same technical floor without securing a decisive weekly breakdown. That resilience has left XAU/USD locked in an increasingly important consolidation as the July opening range develops and the broader March decline begins to lose momentum.
The price of Gold has recovered from June's sharp sell-off, and HSBC believes the precious metal can continue to rebound even as a hawkish Federal Reserve keeps US yields elevated. The Gold price in US Dollars (XAU/USD) traded near $4,165 on Friday, up almost 1% on the day after rebounding more than 3% since the start of July.
Gold is testing critical trend resistance after a sharp correction, with key support holding. The next move depends on whether bulls can regain momentum.
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Global markets are nervously anticipating the release of the U.S. Consumer Price Index (CPI).
The gold market has fallen during most of the week, as we continue to see the US dollar cause issues for gold bulls. It looks as if we are at a major point of inflection.
Gold managed to hold support at 4020-30 yesterday to meet the target of 4100 and above. As we see over the chart, prices remain inside a triangle formation with support at 4050 and resistance at 4140.
Until we see a weaker US dollar, gold will continue to look a bit soft, leaving only short-term buying opportunities. Gold remains a lackluster market to deal with at the moment.
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