Gold, Chart of the Week: XAUUSD bulls pushing up against key resistances ahead of US CPI

Gold is at a crossroads ahead of the US CPI event.
Bulls look to fully test the commitments of the bears.

Ross J Burland FXStreet

Gold rose to the highest in nearly three weeks on Friday despite a better-than-expected rise in US jobs in October. Counterintuitively, US bond yields and the US dollar fell even as the data likely firms the Federal Reserve's determination to slow the economy as inflation stays high. The Fed on Wednesday set its target interest rate another 75 basis points higher to a range between 3.75% and 4.00%. Chair Jerome Powell said later at a press conference that it was "very premature" to think about slowing the pace of monetary tightening.

However, investors' risk appetite was running reasonably high on Friday, following signals from China that the government could relax some of its stringent restrictions around COVID. ''Following this Friday's massive gold and commodity rally, driven by speculation China will moderate COVID restrictions and somewhat mixed payrolls, we look for specs to again grow the shorts they covered at the end of this week,'' analysts at TD Securities said.

''At $1,680/oz, the yellow metal is at a technical point that may easily see a sharp reversal. Indeed, with inflation still a big problem and the US economy running hot, rates on the front end will continue to rise, and the dollar will be firm, which prompts us to think that a correction is on the cards starting in the not-too-distant future.''

Meanwhile, the charts see the price pressured in a firm downtrend and there are prospects of a bull correction to fully test the bear's commitments ahead of the US Consumer Price Index data for the forthcoming week.

Gold weekly charts

The price is accumulating at a prior structure in three weekly bottoms.

That W-formation looks menacing for the week ahead with prospects of a push into the trendline and when coupled with the following Crab harmonic pattern on the daily chart:

Gold daily charts

The price slid out of a micro trendline and is now accumulating on the backside which opens risks of a move higher.

Gold H1 chart

The last leg of the W-formation is overextended giving rise to the risks of a correction prior to a sizeable push to the upside again.

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

GBP/USD defends 1.3300 after strong UK PMI data

Following Thursday's sharp decline, GBP/USD clings to small gains above 1.3300 in the American session on Friday, supported by the upbeat UK Retail Sales and July PMI data. Nevertheless, the pair's upside remains capped as investors cling to a cautious stance amid a further escalation of tensions in the Middle East. The US July PMI data failed to trigger relevant price action.

EUR/USD remains below 1.1400 after mixed US PMIs

EUR/USD pressures daily lows below the 1.1400 mark in the American session on Friday. Mixed S&P Global PMIs, as manufacturing output contracted while services activity expanded in July, triggered no relevant market reaction. The focus remains in Middle East developments and inflation-related concerns.

Gold reclaims $4,100 os Iran diplomacy hopes temper Fed hike bets and weigh on USD

Gold looks set to build on a modest bullish gap-up opening on Monday, beyond $4,100, as hopes of US-Iran peace talks weigh heavily on crude oil prices, easing inflation fears and tempering Fed rate-hike bets. Moreover, the optimism drags the safe-haven US Dollar away from a one-month top, touched on Friday, and supports the non-yielding bullion. The focus now shifts to the crucial FOMC policy meeting this week.

Week ahead: Fed, BoE and BoJ face inflation test as markets reprice interest rate paths

The US dollar gained against the other major currencies this week amid the escalating tensions in the Middle East as well as US President Trump’s decision to proceed with a new round of tariffs after previously imposed levies expired.

Australian Dollar outlook: Chances of another rally won’t be decided in Canberra, but in Washington

The Australian Dollar rode a rollercoaster in the first half of the year, hitting a four-year high and then correcting. The currency enters the second half with an outlook full of uncertainty due to renewed hostilities in the Middle East, which clouds the inflation outlook and interest rates.

US Dollar mid-year outlook: Exceptional currency, exceptional risks?

The US Dollar enters the second half of 2026 in a markedly different position from a year ago. The King currency has recovered, reflecting persistent US inflation, changing expectations for Fed policy, geopolitical tensions and renewed demand for defensive assets.