Gold prices edged higher on Tuesday to test a strong trading level of $1,314 and managed to form a double top setup. Recalling FX Leaders Feb 13 – Economic Events Brief, the Bureau of Labor Statistics will be releasing the consumer price index data at 12:30 (GMT). The US CPI is expected to gain by 0.1% vs. -0.1% in January. Whereas, the Core CPI m/m is expected to remain steady at 0.2%.

As you know, there’s a negative correlation between gold and the Greenback. Therefore, better than expected inflation is likely to drive bearish waves in gold. Perhaps, that’s the reason why we are seeing fewer fluctuations in gold.

The technical side hasn’t changed much. On the 4-hour chart, gold is still facing strong resistance at $1,314. Below this, the yellow metal is highly likely to stay bearish until $1,307 and 1,302. Whereas, the bullish breakout of $1,314 can lead to gold prices towards $1,326 later this week.

Support Resistance
1305.06 1321.37
1295.8 1328.43
1279.48 1344.74
Key Trading Level: 1312.11

Gold – XAU/USD – Trading Plan

The idea is to stay bearish below $1,313.50 with a stop below $1,316 to target $1,310. Whereas, I will be looking for a buy position above $1,314 today.

Good luck!