Gold looks bid at current levels, forming a possible pennant formation ahead of the inflation data in the United States. The yellow metal bounced from below $1,700 a few weeks ago, consolidated for a while, and then regained the $1,800 level.
At the current $1,835 level, gold looks constructive, and investors get ready for the next leg higher. Inflation data for the month of April is expected tomorrow. Fears of higher inflation are the main driver in the precious metals market. Gold has traditionally acted as a hedge against inflation for centuries, so this time should be no different.
The market expects the Core CPI to come out at 0.3% on an MoM basis. If inflation ends up much higher than expected, traders may have the perfect excuse to send the price of gold even higher.
Gold Technical Analysis
From a technical perspective, the market forms a pennant formation. To trade it, bulls may want to wait for a break and close above the highest point in the technical pattern before going long. The stop-loss order must be set at the lowest point in the consolidation, while the take profit equals the length of the poll, projected from the breakout point.
Gold Price Forecast
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