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- Gold price remains bid while inside of a rising channel. It bounced from dynamic support and now threatens to make a new higher high.
Inflation data in the US did not derail the gold price. The market found dynamic support while inside a rising channel and bounced from the lows.
Because gold is viewed as the ultimate hedge against inflation, many traders were spooked by the gold’s move lower last Wednesday. After all, higher inflation leads to higher gold prices – right?
That is correct, but what traders failed to realize is that markets need time to digest information and to react to it. In other words, it is too early to judge the impact of the rising US inflation on the price of gold. If anything, the gold market’s reaction was triggered by the general move higher in the dollar.
Moving forward, the price of gold remains bid inside the rising channel. It held the $1,800 level, a constructive reaction, and now builds energy to make a new high. If it is able to reach a new high while the USD gains against its G10 peers, we may say that the gold price starts behaving as the ultimate hedge against inflation.
Gold Price Technical Analysis
Bulls may want to stay on the long side with a stop at $1,800 and targeting a risk-reward ratio of 1:3
Gold Price Forecast
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