Gold Breaks Resistance as Inflation Data Looms

Gold has broken through a key resistance level of $4,380 and is now trading at $4,422.30, representing a 7.57 percent gain over the past week.

This technical breakout shifts the market's focus to the next target, which is $4,500. The catalyst for the move was the soft US jobs report in July, which caught markets off guard and led to a decline in the dollar index to around 99.70 points.

A softer greenback makes gold cheaper for international buyers, adding support to the rally. However, market participants are now looking ahead to Wednesday's inflation data, which could impact the Federal Reserve's interest rate decisions.

Should the inflation reading come in below expectations at 3.4 percent year-over-year, it would likely reinforce the view that the Fed is done hiking rates. This scenario is particularly favorable for gold, as it pays no yield and tends to thrive when the opportunity cost of holding it declines.