Key Points
- Gold price recently recovered from the $1219 low, but currently facing resistance near $1230.
- There is a major bearish trend line with resistance at $1230 on the hourly chart, preventing an upside break.
- Earlier today, the Chinese Consumer Price Index for Jan 2017 was released by the National Bureau of Statistics of China.
- The result was above the forecast, as the CPI increased by 2.5% in Jan 2017 (YoY), more than the forecast of 2.4%.
Gold Price Technical Analysis
There was a decline from the $1237 high in Gold price against the US Dollar. The price traded as low as $1219 before it started a recovery. At the moment, the price is trading above the 38.2% fib retracement level of the decline from the $1237 high to $1219 low.
However, it is facing a major bearish trend line with resistance at $1230 on the hourly chart, which also coincides with the 61.8% fib retracement level of the decline from the $1237 high to $1219 low.
So, the price may fail to move higher, and there is a chance of a downside move towards the $1225 level in the short term.
Chinese Consumer Price Index
Today in China, the Consumer Price Index, which is a measure of retail price variations within a representative basket of goods and services was released for Jan 2017 by the National Bureau of Statistics of China. The market was expecting a rise of 2.4% in Jan 2017, compared with the same month a year ago.
However, the result was above the forecast, as the CPI increased by 2.5% in Jan 2017. When we look at the monthly change, the market was expecting a rise of 0.7% in Jan 2017, compared with the previous month, but the increase was 1%.
Overall, Gold price has reasons to trade further higher, but it needs to clear the trend line resistance at $1230 for additional gains.
