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The GOLD price has come into a resistance level, will the price reverse here or continue to trade higher?

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Gold Analysis

The price of Gold is back to the previous weekly lows, could the price find resistance here or will we see the price rally in line with the range? Fundamentally the USD data has been beating forecasts, and if the CPI data does the same this week we could see the Fed having to act more aggressively than they want to. In a previous meeting the Fed Chairman Powell expected softer job numbers and softer inflation, however, the jobs data showed significant growth in employment with wages also seeing an increase. This is not what the Fed wants to see in order to control demand. This could push the Fed into hiking rates further than the expected 50bps. 

Recent history tells us that when the Fed acts more aggressively the price of Gold falls. With the price being at resistance we could expect to see Gold move lower in the short term. 

GOLD bbm

The monthly chart showed the price of Gold closing back within the large range. This close could be a sign of a move back to the highs of the range. If that is the case we would see a monthly impulsive phase form, in these impulsive phases the weekly and daily charts form a bullish trend. At this moment in time the weekly trend is still technically making lower lows and lower highs. This is still a bearish trend, meaning we could be looking for another move lower in the near term or until the weekly chart forms a new high. 

However, if the price was to continue to make highs highs and higher lows on a shorter time frame such as the 4hr, we could expect another move higher.

Did you see our Week Ahead Analysis? You can see it here.

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