Gold In Demand

The breakout idea in gold, issued this week, has hit its initial target. The breakout in gold prices this week came despite a set of higher-than-expected inflation figures for the US, which saw the Dollar trading higher. While the upshot in USD has curtailed the rally in gold for now, with both MACD and RSI firmly bullish and with the retail community still more than 70% short, there is room for gold prices to continue higher towards 1919.92 while the market holds above the 1826.71 level.

Key Data to Watch

Little in the way of key data left this week. Gold moves are likely to remain heavily tied to USD into the weekend. Looking ahead to next week, the main focus will be on US retail sales which holds the potential to be a major catalyst for USD and gold price action. Away from USD flows, broader moves in risk markets will also be key to gold direction. If the current pull back in US equities deepens, this will provide support for gold to move higher near term.