Gold jumped after US inflation report which added to strong expectations for Fed rate cut next week, as inflation rose slightly less than expected in September.
However, September’s CPI numbers were insufficient to spark stronger rally, as economists expect full impact of import tariffs to show in coming months and stronger inflate prices.
Metal’s price remains within the range of past three days after critical $4000 support contained sharp sell-off from new record high, but recovery attempts were so far limited and holding well below upper triggers at $4200 zone (daily Tenkan-sen / psychological) which previously acted as one of key supports.
Hourly studies lack positive momentum and weighed by overbought conditions and recent formation of 100/200HMA bear-cross that so far limits upside potential.
Structure on daily chart shows weakening signals as positive momentum continues to fade, although larger bulls are expected to remain in play while the action stays above $4K.
Gold is on track for the first weekly loss after a steep uptrend in nine straight weeks which may add to initial signals of potential deeper pullback in case of loss of $4000 trigger.
Otherwise, it will continue to look like a healthy correction of larger uptrend, though with lift above $4200 required to signal that bears have found first ground and continue to regain control.
Traders shift their focus on next week’s Fed policy meeting and release of US PCE Index (Fed’s preferred inflation gauge) which would provide fresh direction signals.
Res: 4161; 4200; 4237; 4292
Sup: 4100; 4057; 4000; 3972
