Gold retains a bullish technical bias while above $1,308/oz

Gold prices have found support down at $1,308/oz once again but have also printed a higher high, en-route to R2 located at $,1318.09. The market has been awash with political headlines, but the US CPI was the first major data release for traders to begin to price back in. 

"Headline inflation in the US is being held down temporarily by energy price falls, but decent growth and a robust labour market suggest price pressures will strengthen," analysts at ING Bank explained.

"US consumer price inflation for January has come in broadly in line with expectations. Lower fuel prices have helped slow the annual rate of headline inflation to 1.6%, the slowest rate since June 2017, but core (excluding food and energy) inflation has held at 2.2% rather than fall to 2.1% as the market was predicting."

The data has fuelled a bid in the greenback as markets price up the probability of a summer Federal Reserve rate hike. The DXY is testing territory out on the 97 handle again with yesterday's downside considered as a correction only. 

Gold levels

Technically, gold's rebound leaves a bullish bias on the charts with an upside target territory towards the rising channel through the 23.6% Fibo of the 23rd Jan lows to recent highs of 1326 at 1314.To the downside, the price has been held up ahead of the 1,300 psychological level which guards the 1297 9th Jan highs before the 23.6% Fibo retracement down at 1,287 and then critical support area around 1276.