Key Highlights
- Gold price corrected higher, but it failed to break the $1,265 resistance against the US Dollar.
- There is a key bearish trend line formed with resistance near $1,264 on the 4-hours chart of XAU/USD.
- The US PPI in June 2018 increased 0.3% (MoM), more than the forecast of +0.2%.
- Today in the US, the CPI figure for June 2018 will be released, which is forecasted to increase by 0.2% (MoM).
Gold Price Technical Analysis
After a major decline, gold price found support near the $1,237 level against the US Dollar. The price recovered above the $1,250 and $1,260 resistances, but it failed to clear the $1,265 resistance.
The 4-hour chart points that the price was capped by the $1,265 resistance and the 100 simple moving average (red, 4-hours). Moreover, a key bearish trend line with current resistance near $1,264 prevented further gains in XAU/USD.
The price started a downside move and broke the 61.8% Fib retracement level of the last wave from the $1,237 low to $1,265 high. On the downside, supports are seen near the $1,242 and $1,240 levels, followed by the last swing low of $1,237.
On the upside, the price must clear the trend line and the $1,265 resistance to set the pace for more gains. The next hurdles above $1,265 are at $1,270 and $1,274.
Recently in the US, the Producer Price Index report for June 2018 was released by the Bureau of Labor statistics, Department of Labor. The market was looking for a rise of 0.2% in the PPI in June 2018, compared with the previous month.
However, the result was positive as there was a rise of 0.3% in the PPI. In terms of the yearly change, there was a rise of 3.4%, more than the forecast of 3.2%.
It helped the US Dollar in an upward move, but gains were limited since both EUR/USD and GBP/USD remained in a positive zone above key supports.
Economic Releases to Watch Today
- German Consumer Price Index for June 2018 (YoY) – Forecast +2.1%, versus +2.1% previous.
- German Consumer Price Index for June 2018 (MoM) – Forecast +0.1%, versus +0.1% previous.
- US Initial Jobless Claims – Forecast 225K, versus 231K previous.
- US Consumer Price Index June 2018 (MoM) – Forecast +0.2%, versus +0.2% previous.
- US Consumer Price Index June 2018 (YoY) – Forecast +2.9%, versus +2.8% previous.
- US Consumer Price Index Ex Food & Energy June 2018 (YoY) – Forecast +2.3%, versus +2.2% previous.
