The USD is gaining against all instruments today, including Gold

How to Trade GOLD on US Inflation Today?

Posted Friday, May 10, 2019 by
Arslan Butt • 1 min read

It’s been a few days now since gold is consolidating in a narrow trading range of $1,291 – $1,287. Taking advantage of the situation, our forex trading signal managed to capture quick take profit in gold. We have US inflation figures up next which typically drives great movement in gold. Let’s make some more profits.

Fundamentals Overview – Trade War & US Inflation

As you know, US and China failed to come to an agreement ahead of  the tariff hike deadline. Therefore, the Trump administration is increasing tariffs on $200 billion worth of Chinese products to 25% from 10%. China also retreated to retaliate with an additional tariff on US goods. Safe haven gold continued to play well with this as dollar still remains bearish.

Headline inflation figures are due for the US session, and economists are expecting a slight jump in the US core inflation figures 0.1% to 0.2%. The CPI is expected to remain unchanged at 0.4%.

GOLD / XAUUSD – Technical View

The technical side of the gold hasn’t changed much this week as the market continues to trade in the sideways range. You can see in the 4- hour chart below, gold is facing a substantial resistance at $1,291 along with support at $1,287.

Positive CPI – The trading range is very likely to be violated on the release of US CPI data. Gold can break downward to extend its rally until $1,277.

Negative CPI- The negative inflation figures can trigger a bullish breakout to extend gold’s bullish rally up to $1,299.

Gold // XAUUSD – Trading Plan

At the moment, we are holding a buy position above $1,283 to target $1,287 and I will be looking to take a sell position below $1,291 until the release of new fundamentals.

Good luck.

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