On Friday, gold traded slightly bullish around 1,286, despite increasing in tariff on 200$ billion worth of Chinese goods. There were some problems between the U.S.- China. Therefore, they couldn’t reach a trade deal and triggered the demand for safe haven assets.
CPI Inflation - Disappoints
According to the U.S. Bureau of Labor Statistics, the U.S. Consumer Price Index rose 0.3% in April on a seasonally adjusted basis following a growth of 0.4% in March.
Over the past 12 months, the CPI index increased 2.0% before seasonal adjustment. However, growth is slower than anticipated. For instance, economists were expecting a CPI figure of 0.4%, but the actual figure came out as 0.3%, missing expectations.
Consequently, the weaker fundamentals are placing a selling pressure on the U.S. dollar, while keeping its substitute, gold supported.
Gold’s Technical Outlook
Gold is facing resistance around the same 1,291 level along with support around 1,284. In fact, gold has formed a small bullish channel on the 4 hourly charts, which is suggesting a bullish trend in gold. The bullish breakout of 1,291 could extend gold prices towards 1,297 today.
Support & Resistance
R3: 1288.44
R2: 1287.1
R1: 1286.45
Key Trading Level: 1285.76
S1: 1285.11
S2: 1284.42
S3: 1283.08
Gold - Trade Tip
Consider staying bullish above 1,285 and bearish below the same level with 30 pips stop and 50 pips take profit on each side. All the best!
