Dollar Weakness Fuels Gold Price Rally Ahead of Inflation Data
The price of gold has received a bid ahead of upcoming inflation data releases as the US dollar index declined to a two-week low. The dollar's weakness is largely due to tightening monetary policies by major central banks, including the Bank of Japan and the European Central Bank, which are scheduled to take place within the next week.
The gold price has been trading within specific retracement zones, with resistance at $4,489.87 to $4,538.77 and key support at $4,319.60 to $4,230.51. The latter area previously halted selling on September 2 at $4,282.62.
The moving average is providing support at the 50-day level of $4,262.18, while resistance lies at the 200-day level of $4,537.36. A potential support cluster has formed around the swing bottom at $4,282.62 and the 50-day moving average, which could attract counter-trend buyers if it is tested.
The inflation data releases on Thursday (PPI) and Friday (CPI) will be crucial in determining whether yields regain control from currency traders. A move through $4,510.93 could create upside momentum to challenge the resistance cluster formed by the 200-day moving average and the 61.8% level.