This morning, gold started to adjust to 3620$/ounce after reaching a new ATH at 3674$/ounce last night.
This move came from profit-taking by investors as gold surged too strongly over the past week, as well as caution ahead of the PPI data release tonight.
Normally, investors tend to take profits to be cautious and limit risks before important data is released. Tonight’s PPI data will give the market a signal about inflation before tomorrow’s CPI data. And this will directly affect the Fed’s decision on interest rate cuts next week.
Therefore, before the US session today, gold is likely to correct strongly to the 3620$/ounce level or deeper to 3600$ to establish a solid support zone.
If the PPI data is positive for the Dollar – gold will see a sharp drop below 3600$.
If the data is negative for the Dollar – it is highly likely that we will see a new ATH tonight.
Technical analysis:
Gold is in a corrective wave from the ATH level. In the short term, buy-sell opportunities can be considered at both ends:
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Buy around 3615 and 3600
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Sell around 3670 – 3674
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