The gold price appears to be trading in a consolidative sideways channel amid a strong battle between the bulls and the bears. The price of the yellow metal is pegged at the $1,560 level with the bulls battling hard to keep it there if not higher.
The price of gold is now pinned a few pips above the current 100-hour and 200-hour SMA lines, which shows that the bulls could be edging the battle.
Gold Price Fundamentals Overview
The yellow metal is trading at the back of a disappointing week in terms of economic data. The latest series of data appears to pint towards a weakness in global economies led by the US, the EU, and the UK. On Tuesday, the US CPI change of December missed the (MoM) expectation of 0.3% with 0.2%. The Producer Price Index ex-food and energy for the same month also came short of expectation with 1.1% versus 1.3% (YoY).
In the UK, the (MoM) change in Manufacturing production for November missed the expectation of -0.3% with -1.7%. The (YoY) change of -2% was also below the expected change of -1.7%. The (MoM) change in Gross Domestic Product -0.3% also failed to meet the expected change of 0.0%. The (YoY) change in PPI core output for December disappointed with 0.9% versus 1.0% expected.
In the EU economic zone, the change in Industrial Production for November missed the (MoM) expectation of 0.3% with 0.2%. However, the consumer price index for December met expectations on all counts. Generally, the general view of the economy based on the data released this week appears to be weak and this could boost the gold price.
Gold Price Technical Analysis (the 60-min Chart)
Technically, the gold price appears to be trading in a consolidative pattern formation just above the current levels of the [100-hour and the 200-hour SMA lines. The price of gold also appears to be approaching overbought levels of the RSI. This could trigger a pullback in the coming days.
Therefore, the bears will be targeting short-term profits at around 76.40% Fib level at $1,549 or lower at $1,539 and $1,529. On the other hand, the bulls will target 50% and 38.20% Fib levels at $1,570 and $1,580, respectively, or higher at $1,592.
Gold Price Technical Analysis (the Daily Chart)
In the daily chart, the gold price appears to have made a major pullback off the current multi-year highs. The price of the yellow metal rallied to top $1,611 last week. The price of gold has also pulled back off overbought levels of the RSI indicator in the daily chart.
Therefore, the bears will be targeting long-term profits at around $1,520 or lower ay $1,483. On the other hand, the bulls will hope for a quick rebound towards $1,580 or higher at $1,611.