Traders, in my earlier post on the gold, I focused on the bearish channel. As discussed, it was very likely to break out in the US session upon the release of US inflation figures.
That's what actually happened to the gold. The US inflation figures were not in favor. In June, the US CPI data fell slightly when it had been expected to gain 0.1% for the month. The yearly inflation rate fell to 1.6% from 1.9%, compared with a previous figure of 1.7%.
Additionally, the US retail sales fell by 0.2% in the month of June after a 0.1% slump. Since the release was less than the forecasted 0.1% increase, investors shifted their investments towards gold and sold the buck simultaneously.
What's New Today?
Now, just like crude oil, the bullion market is underpinned due to the release of the GDP figures from China, the largest importer of precious metal gold. Data showed that the Chinese economy grew more than anticipated in the 2nd quarter at an annualized rate of 6.9%. The analysts were only expecting a quarterly growth of 6.8%.
What's The Link Between China GDP & Gold?
Favorable economic events from the Chinese economy fuel the sentiment that China, being the largest gold importer, may increase the demand for haven assets. Consequently, speculators increase the demand for haven assets. Refer to this article to help learn more about gold trading.
Forex Trade Signal – Idea
As of now, the gold is consolidating in the narrow range of $1228 – $1232. Investors are advised to wait for the correct level to enter the market. I'm taking a bullish approach but $1225 seems like the appropriate level to enter a buy. Good luck and keep an eye out for our trading signals.