Gold price was already off to a bullish start in yesterday’s trading amid coronavirus concerns but traded even higher on disappointing US CPI. XAUUSD was consolidating around $1,575.00 ahead of the report then rallied to $1,578.05 following the release. By the end of the New York session, it had settled $9.92 above its open price at $1,575.61.
The Bureau of Labor Statistics reported that the headline CPI figure for January was at 0.1%. It missed the forecast at 0.2% which caused some dollar weakness. Meanwhile, the core CPI reading came in as expected at 0.2%. This report is particularly important because it tracks inflation. Higher inflation figures tend to be bullish for the dollar because they could signal economic growth and may be enough for the Fed not to cut rates.
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Gold Price Outlook
On the hourly time frame, we can see that gold price is currently testing support around the 23.6% Fib level when you draw from the low of February 12 to yesterday’s high. If there are enough buyers in today’s trading, a break of the Asian session highs could trigger a rally to $1,592.83 where it peaked on February 3.
Meanwhile, if there are not enough buyers in the market, XAUUSD could trade lower. It could drop to $1,568.15 where there seems to be a confluence of support. This price looks to coincide with both the 61.8% Fib and the rising trend line when you connect the lows of February 5 and February 12.