Gold price Analysis: Holds steady above $1700 mark, bullish bias remains

Gold held on to its mildly positive tone through the early North American session, just above the $1700 mark and had a rather muted reaction to the latest US consumer inflation figures.

The recent price action over the past one month or so has been confined between two converging trend-lines, forming a symmetrical triangle. The triangle also marks a brief consolidation phase before the next leg of a directional move. Given the commodity's recent strong rally from YTD lows ($1455) to multi-year tops ($1748), the triangle further seemed to have constituted towards the formation of a bullish continuation pennant pattern on the daily chart.

Meanwhile, oscillators on the mentioned chart have managed to hold in the positive territory and support prospects for an eventual bullish break through the near-term trading range, setting the stage for additional gains. The triangle resistance is pegged near the $1720 supply zone, which if cleared might be seen as a fresh trigger for bullish traders and lift the commodity back towards retesting multi-year tops, around the $1748 region.

On the flip side, any dips might still be seen as a buying opportunity and help limit the downside near the triangle support, near the $1685 region. That said, a convincing breakthrough will negate the constructive set-up. The commodity might then accelerate the slide towards intermediate support near the $1670 region and the $1660 level. Some follow-through selling below 50-day SMA, around the $1648 zone might be seen as a key trigger for bearish traders.

Gold daily chart

Technical levels to watch