Gold Benefits from Weaker US Inflation and Downbeat US Dollar; Mixed Data and Geopolitical Tensions Limit Upside Potential

Despite a minor retreat from the pivotal $2,050 resistance level, GOLD prices have continued their upward trend for a third week. This is because of the weaker US Dollar and lower US inflation numbers. Gold purchasers are hesitating because of conflicting reports on inflation in the United States, as well as worries about the possibility of a US default and deteriorating relations between the United States and China.

 GOLD prices have been trending upwards due to uncertainty surrounding US inflation data and market consolidation prior to the release of the US Producer Price Index (PPI) and the University of Michigan’s (UoM) 5-year Consumer Inflation Expectations, but have been experiencing some downward pressure due to China’s lack of effort to ease tensions with the US and softer Consumer Price Index (CPI) numbers from China.

Technically speaking, the upper Bollinger band on the daily chart, along with the prior day’s and month’s highs, add up to a $2,050 barrier that GOLD is having trouble clearing. Before the crucial $2,050 barrier, the XAU/USD bulls face an intermediate battle at $2,043, as shown by the Pivot Point one-month R1. Upside filters are bolstered by the $2,057-58 zone, which contains the weekly Fibonacci 23.6% retracement level. Gold’s price has lately hit a new record high, and if it can hold above $2,058, it may reach the all-time high of roughly $2,080.

Gold’s immediate support level is $2,025, which is marked by the middle Bollinger band on the four-hour chart and the Fibonacci 23.6% on the monthly chart. The Fibonacci 61.8% level, located at $2,015, might be reached in the next week if prices continue to fall. The $2,010 barrier could function as a further negative filter before allowing the XAU/USD bears to take control if Gold continues to be weak beyond $2,015. The mentioned support levels correspond to the 38.2% level of the Fibonacci sequence on a monthly scale.