Gold Price: Pennant Formation Hints to More Upside

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Written By: Mircea Vasiu

May 11, 2021, 09:29 BST 09:29

Gold prices

Summary:

Gold price remains bid as it forms a pennant formation while above $1,830. The market participants await the inflation data in the United States.

Gold looks bid at current levels, forming a possible pennant formation ahead of the inflation data in the United States. The yellow metal bounced from below $1,700 a few weeks ago, consolidated for a while, and then regained the $1,800 level.

At the current $1,835 level, gold looks constructive, and investors get ready for the next leg higher. Inflation data for the month of April is expected tomorrow. Fears of higher inflation are the main driver in the precious metals market. Gold has traditionally acted as a hedge against inflation for centuries, so this time should be no different.

The market expects the Core CPI to come out at 0.3% on an MoM basis. If inflation ends up much higher than expected, traders may have the perfect excuse to send the price of gold even higher.

Gold Technical Analysis

From a technical perspective, the market forms a pennant formation. To trade it, bulls may want to wait for a break and close above the highest point in the technical pattern before going long. The stop-loss order must be set at the lowest point in the consolidation, while the take profit equals the length of the poll, projected from the breakout point.

Gold Price Forecast

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Written By: Mircea Vasiu

Mircea, MBA in International Business graduating Magna Cum Laudae, trades for a living and contributes to various financial publications for more than six years. He writes about macroeconomics, stock indices, currencies, and most recently ETFs and individual stocks. For the past decade, he’s involved in everything trading related, mostly in the currency market, both with manual and algorithmic trading.