Gold Daily Analysis – October 16, 2017

Gold prices edged higher on Friday after the release of the weaker-than-expected U.S. inflation. Gold continues to trade higher on Monday morning despite Yellen’s hawkish comments over the weekend.

The report was released after Fed’s September minutes on Wednesday which revealed that “many participants expressed concern that low inflation readings this year might reflect not only transitory factors but also the influence of developments that could prove more persistent.”

Technical Outlook

The Gold 4H chart has formed “Rounding Bottoms chart pattern”.  Currently, prices are expected to move towards the neckline at $1316 as this is a crucial place. A break above and close of a 4H candle could lead towards $1338 level. Alternatively, if it does not break above, then selling pressure may extend towards $1293 which will hold as the support.

A Rounding bottom looks similar to the cup and handle pattern, but does not perform the same as the “handle” portion. Technically, prices could break above and an upside rally is expected.