Gold inched higher on Friday, increasing the price of yellow metal to more than $1200.00 an ounce following some key economic release. The technical bias remains bullish because of a higher low in the recent downside move.
Technical Analysis
As of this writing, the precious metal is being traded near $1204 an ounce. A hurdle can be noted near $1225, a short term horizontal resistance area ahead of $1278, the upper trendline resistance as demonstrated with pink color in the given below chart.
On the downside, a support may be noted around $1180, the low of January 27th ahead of $1173, the 23.6% fib level and then $1100, the psychological number as demonstrated in the given above daily chart.
US Producer Price Index
Producer price inflation in the U.S. increased more than forecast in February, while core prices also showed stronger-than-expected upward pressure, official data showed on Tuesday. In a report, the Commerce Department said that producer prices increased by a seasonally adjusted 0.3% last month, higher than the forecast for a 0.1% advance and compared to the 0.6% gain seen in January. Year-over-year, the producer price index (PPI) rose 2.2% in February, compared to expectations for a gain of 2.0% and following a 1.6% increase in the preceding month.
Trade Idea
Considering the overall technical and fundamental outlook, buying the precious metal around current levels can be a good strategy.