Gold Prices Encounter Resistance at $2,020, Maintaining an Upward Bias Amid US Inflation Slowdown and Fed Rate Hike Speculation

A closer look at the US inflation report reveals that headline inflation has declined more than anticipated to 5.0%, largely due to weaker gasoline prices. Investors are mindful that oil prices have experienced a significant surge in April following OPEC+’s unexpected decision to cut production, which could hamper the GOLD bull’s momentum.

In contrast to headline inflation, core CPI has risen to 5.6% compared to the previous 5.5% release, with rent prices staying consistent. This suggests that core inflation may remain persistently high in the future.

Late Wednesday, San Francisco Fed Bank President Mary Daly stated, “There’s a lot more in the pipeline of monetary policy tightening,” as reported by Reuters. However, she did not predict the end of the tightening cycle.

 GOLD prices are trading within a symmetrical triangle chart pattern on an hourly basis, demonstrating a sharp reduction in volatility following dramatic price swings. The ascending trendline of the pattern starts from a low of $1,985, while the descending trendline originates from a high of $2,030.

Similarly, the 20-period Exponential Moving Average (EMA) at $2,015 supports gold bulls. Concurrently, the Relative Strength Index (RSI) remains in a buying zone, above 50, reinforcing the likelihood of a continued bullish trend.

Gold’s immediate resistance lies at $2,024, with support around $2,012. Owing to the formation of “three white soldiers,” gold can potentially maintain a bullish bias today. Therefore, it may be worth considering a buying position above the $2,016 level today.