December Comex Gold futures are driving lower shortly before the release of the latest U.S. consumer inflation data at 1230 GMT. Traders are looking for monthly CPI to rise 0.3% and monthly Core CPI to come in at 0.2%. Stronger than expected numbers should put pressure on gold prices.
An increase in consumer inflation will trigger a rise in U.S. Treasury yields which will help boost the U.S. Dollar, making it a more attractive asset. However, it will not mean the Fed will raise rates this year. The only thing a strong number will do is scare the short-sellers out of the U.S. Dollar.
Weakening U.S. stock prices could slow down the selling in gold.
The main trend is up according to the daily swing chart. A trade through $1302.30 will change the main trend to down with the next main target $1281.30.
A move through $1362.40 will signal a resumption of the uptrend with potential targets at $1363.80 and $1370.80.
The short-term range is 1302.30 to 1362.40. Its retracement zone is $1332.40 to $1325.30.
The main range is $1281.30 to $1362.40. Its retracement zone is $1321.90 to $1312.30.
Based on the current price at $1324.00, the market is trading inside a price cluster formed by a retracement zone inside a triangle.
I’m looking for a possible two-sided trade if gold remains inside the triangle, bounded by $1330.40 and $1320.30, so basically a $10.00 range.
A sustained move over $1330.40 will be a sign of strength. Crossing over to the 50% level at $1332.40 will mean the buying is getting stronger. This is a potential trigger point for a surge into $1346.40.
Taking out the bottom of the triangle at $1320.30 could trigger an acceleration into $1312.30, followed by an uptrending angle at $1307.30.
Summary, bullish over $1330.40 and bearish under $1320.30.