Gold price action has reversed earlier losses on the day after the US Consumer Price index number came in at highs not seen since September 2008. The US CPI headline number registered at 0.8%, which was better than the 0,3% that market analysts had predicted
and also higher than March’s 0.6% figure.
The jump in consumer inflation has reignited bids on gold, which is used as an inflation hedge. Gold price is consequently trading marginally higher on the day. However, the upside on gold is capped by the 2.20% rise in the US 10-year Treasury Note yield. The presence of a large and pretty strong resistance wall between $1828 and $1840 has restricted the increase in gold prices on the day.
Technical Outlook for Gold Price
The violation of the resistance wall between 1828 and 1840 is gradually coming on stream. The active daily candle (or subsequent ones) must close above this level with a 3% price penetration level for the 1860.77 resistance to come into the picture as the next target. Above this level, the subsequent resistance targets exist at 1881.68 and 1900.05, in that order.
On the other hand, failure to breach the resistance wall could lead to a pullback, targeting 1815.20 initially, followed by 1800.00 and 1789.49. 1763.30 and 1741.01 are additional downside targets that will only become relevant with a price decline below 1789.49.
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Gold Price (XAU/USD); Daily Chart
