On Monday, the gold prices are stable and remain near the minimal points. The strong labor market and uncertainty in the future positive inflation rates make investors cautious and refrain them from purchasing metal.
This week, there will be a publication of renewed data that is important for the gold market, which is becoming less bullish after the release of a strong US jobs report.
On Tuesday, attention should be paid to the report on the US CPI, as it could be the next catalyst for the precious metals market. TD Securities strategist Daniel Ghali said that the market needs a strong stimulus to increase the activity of gold sales, and the renewed CPI data could play this role. But to do so, the report should include the unexpected values.
We support the strategist’s opinion that gold needs very good data on US inflation.
According to data from the World Gold Council, in January, the global exchange-traded funds supported by the precious metal still had difficulties. Such a situation remains, although gold had the best start this year compared to other precious metals.
ETF also hints that the interest in gold isn’t high enough. It's hard to say exactly what it means. On the one hand, private investors simply don’t believe in the current gold growth cycle. On the other hand, in case of a new rally, private investors will act as fuel for growth.
We wrote on the last forecast for gold that there is a flag figure on the hourly timeframe, according to technical analysis. The trend of this figure is directed downwards, and the new local lows in gold prices will be highly likely renewed. Today we see that there was a breakthrough directed downwards thus, there is an opportunity to open the short positions.
The downside target could be the 1.618 Fibonacci level of all gains since February 3. This is the level of 1842 dollars.
Stop-loss could be placed a little higher than the strong Fibonacci level of 0,5 which corresponds to the price of 1877 dollars.
Decrease in gold price:
Take profit — 1842
Stop-loss — 1877
This content is for informational purposes only and is not intended to be investing advice.