Gold Breaks Out Post U.S. CPI Data: What’s Next?
2023.07.13 04:18
- Recent range highs broken after CPI release
- Lower inflation could increase gold’s appeal
- One more rate hike expected from the Fed
The US inflation data gave just the boost it needed to break back above $1,940 after failing to pierce that level in recent days.
The yellow metal has been range-bound in recent weeks between $1,900 and $1,940, and today’s report did what the jobs data failed to do; it provided the catalyst for a breakout.
Gold Daily
Source – OANDA on Trading View
There remains plenty of resistance ahead for gold, and today’s move doesn’t necessarily suggest the correction we’ve seen since May is over but it’s a massive step in the right direction. If the inflation data continues to improve then that could be bullish for gold.
The next tests for gold are $1,940, $1,960, and $2,000, which roughly represent the 38.2%, 50%, and 61.8% Fibonacci retracement levels from the May high to the June lows.
The inflation data may have come too late to change the outcome of the July Fed meeting, especially in light of the June jobs report, but it may alter the central bank’s language if it does hike by another 25 basis points. It’s going to be a big summer of data.
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