XAU - Gold takes profit, eyes on U.S. inflation data this week

Gold prices retreated on Monday as the dollar rose further to a more than two-year high after a strong jobs report last week reinforced expectations that the Federal Reserve will be cautious in cutting interest rates this year. The price of gold once fell to $2,656.30, and hit a one-month high of $2,697.83 last Friday. Profit-taking to a certain extent triggered the gold price pullback. In addition, Trump will be sworn in as President of the United States next week. His proposed tariffs and protectionist policies are expected to spur inflation and could spark a trade war, increasing gold's appeal as a safe-haven asset. This week, we will first pay attention to US inflation data, weekly unemployment claims and retail sales data to further understand the U.S. economy and the Federal Reserve's policy plans. Markets are now pricing in a 25 basis point rate cut this year, compared with expectations last week of 40 basis points.

As can be seen from the technical chart, the trend of gold prices since October last year has continued to narrow, with the lows ranging from $2536.71 on November 14 to $2585.96 on December 18, and then to $2595.54 on December 30. On the other hand, on October 31 The daily high was 2790.15, and on December 12, it only reached a high of $2725.79; with the high and low levels narrowing, a set of triangle patterns were formed accordingly, with the top and bottom currently at 2694 and $2614 respectively. In other words, if there is a breakthrough in the gold price in the future, there will be a great chance of a large-scale one-sided market. If the gold price further breaks through the top of the technical triangle and even the psychological barrier of $2700, the gold price is expected to stage a peak-testing rally and then target $2726 and $2790. As for the near term support, it is expected to be at 2660 and the 100-day moving average of $2634. On the other hand, we should also be careful if the gold price falls below the bottom of the triangle, which would also destroy the recent upward trend. The extended adjustment target is forecasted to $2,580.

London Gold January 14
Predicted early range: 2668 – 2674
Resistance 2680 – 2693 – 2705
Support 2656 – 2644 – 2632

SPDR Gold Trust gold holdings:
January 6 – 871.08 tons
January 7 – 871.08 tons
January 8 – 871.08 tons
January 9 – 871.08 tons
January 10 – 876.82 tons
January 13 – 874.53 tons

8/1 AM London Gold Fix: $2679.8
8/1 PM London Gold Fix: $2669.5

Any questions? contact our professional analysis team