After soft US inflation data released yesterday, the hopes are pinned on the upcoming US core retail numbers. Any reading above 0.2% will be considered as a solid number and it is likely to push the price of gold lower. Gold investors are watching every single economic data very carefully because the Fed could change its stance towards their monetary policy if the economic numbers start to improve. So far the gold price is defending all the pessimism and the bull are hoping that the Fed doesn’t become hawkish any time soon.
The gold price doesn’t have much support from the geopolitics because the tensions between the US and China seems to be easing off over the trade deal. It is widely expected that both countries are working together to find a suitable solution for the ongoing trade war. Moreover, the chances of another US government are also minuscule because it appears Donald Trump is willing to work with Democrats. Thus, all these risk-off events aren’t going to support the gold price. The only hope for the bulls is that the Fed remains dovish and for that to happen we need to see the economic number remain only stable not picking up any kind of momentum.
In terms of technical analysis, the gold price is defending the level of $1,300 so far. The gold price needs some serious momentum behind it in order to break above $1,327 which has acted as a strong resistance for now. The hopes for the bull rally to continue will remain alive as long as the price continues to trade above the 50-day and 100-day moving averages shown in green and pink respectively.
The major support zone is shown by the solid horizontal green line and the minor with the dotted line. Similarly, the major resistance is shown by the solid horizontal red line and minor with the dotted horizontal line.
