Gold to Gain Support Near $1,720 – Is It a Good Idea to Go Long?

The gold price is experiencing wild swings during the Asian session. In the last two hours of trading, the precious metal has fluctuated in a slightly more comprehensive range of $1,723.27-1,744.34. Unsurprisingly, the volatile move could be the asset’s undoing. Taking a closer look at the movement, it appears to be a responsive buying action. It occurs when market participants find the asset GOLD to be a good value bet and have soaked exclusive offers with little effort.

Meanwhile, the US dollar index (DXY) has seen profit-taking following a 19-year high of 108.47. The DXY has performed admirably in anticipation of a higher inflation rate release. The US Consumer Price Index (CPI) preliminary estimate is 8.8 percent, up from 8.6 percent in the previous release. A higher-than-expected inflation rate release will compel the Federal Reserve (Fed) to tighten policy further and raise interest rates to 2.25-2.50 percent.

Aside from US Inflation, US Retail Sales, which will be released on Friday, are also significant. The economic data is expected to be 0.8 percent higher than the previous print of -0.3 percent.

Gold Technical Outlook

In previous sessions, the gold price fluctuated within the sideways track, with the stochastic losing its positive momentum gradually, while the EMA50 continued to press negatively on the price.

As a result, these factors encourage us to continue suggesting a bearish trend for the foreseeable future, and the price needs to break 1730.00 to get a negative motive that will help push the price to 1700.00 directly, noting that holding below 1745.00 represents the initial condition to continue the expected decline.

Today’s trading range is expected to be between 1720.00 support and 1760.00 resistance.

Today’s expected trend is bearish.

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Skerdian Meta

Lead Analyst

Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.

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