The gold price (XAU/USD) on Thursday rallied to extend the current weekly gains towards $1,475 but failed to carry on later pulling back to $1,470. The price of the yellow metal has been on a bullish run since Tuesday after extending last week’s losses on Monday to bottom at around $1,447 on Tuesday morning.
The price of gold has since broken out of what appears to be a sharply descending channel coming off a highly volatile sideways channel. The gold price now appears to be attempting to return to the sideways channel following Thursday’s rally.
Gold Price Fundamentals Overview
From a fundamental perspective, the price of gold is trading at the back of busy period in the global markets. The latest round of economic data was a little underwhelming based on forecasted figures and this could part of the reason why the price of gold has rallied since Tuesday.
In the US, the seasonally-adjusted core CPI missed expectations of 265.106 with 265.011 while the CPI change ex-food and energy also came short of 2.4% with a 2.3% change for October on a (YoY) basis. The general US CPI beat the annual change estimate of 1.7% with 1.8%.
In Europe, the preliminary Q3 employment change (QoQ) missed the expectation of 0.2% with 0.1% while the seasonally-adjusted preliminary GDP for Q3 (YoY) beat the expectation of 1.1% with 1.2%.
In the UK, the latest economic data disappointed on several levels led by Industrial Production and Manufacturing Production for September and the preliminary Q3 GDP as they all missed expectations.
Gold Price Technical Analysis (the 60-min Chart)
Technically, the price of gold appears to have recently made a bullish breakout off a descending channel, which indicates an attempt to trigger a trend reversal. If the price of the yellow metal can return to trade within the sideways channel as illustrated on the 60-min chart, then this would signal a full recovery from the plunge.
Therefore, the bulls will be targeting short-term profits at around $1,475 or higher at $1,481 going into the tail-end of the week. On the other hand, the bears will target profits at around $1,466 or lower at $1,460.
Gold Price Technical Analysis (the Daily Chart)
In the daily chart, the price of gold appears to be on the verge of making a recovery after the formation of a consolidative triangle pattern culminated with a bearish breakout. Gold price now trades just below the 100-day SMA and several levels above the 200-day SMA. This could lead to a consolidative pattern formation between the two lines before convergence.
Therefore, the bears will be targeting long-term profits at around $1,449, $1,428 or lower at $1,410. On the other hand, the bulls will hope that the recovery can continue towards $1,496, $1,516, $1,532 or higher at $1,550.