Gold Price
Gold price seems to have benefitted from the lockdown which has kept US citizens and residents from spending, resulting in a lower-than-expected CPI figure. Lower gasoline prices as a result of record lows in crude oil price for April also had a significant contribution to the more substantial drop in the monthly CPI and Core CPI figures. The US CPI and US Core CPI came in at -0.8% and -0.4% respectively, which were lower than the consensus of -0.7% and -0.2% respectively. The figures were also lower than the -0.4% and -0.1% registered in the last report released in April.
The data set was viewed by the markets as USD-negative, causing the greenback to falter against major currencies as well as the gold price as depicted on the XAUUSD daily chart.
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The price outlook for XAUUSD takes place on the daily chart, where we see the symmetrical triangle that I identified in the last analysis piece still intact and controlling the price candles. Between the time I did the previous analysis for the gold price and now, the price has retreated from the upper channel border (with a lot of that strength coming from yesterday’s generalized strength on the USD). The gold price has now bounced on the lower edge and is heading back towards the upper border.
There are only two possibilities in terms of the final outcome, as price trades towards the confluence of the trend lines bordering the triangle. A bullish breakout tallies with the result seen on this pattern about 80% of the time, where the break continues the initial trend that entered the pattern. This outcome clears a pathway for the gold price to aim for the 1738.54 price level (April 16/23 tops), with 1753.29 and 1792.26 in the line of sight if the price continues to advance beyond the initial target.
On the flip side, a breakdown of the triangle brings 1680.24, 1658.89 and 1635.53 into focus. Further declines below 1600 could target the support levels at 1590.70 and 1563.83.