Gold Price Stalls at Neckline of Head-and-Shoulders Pattern
Gold's price stability is being tested by renewed economic risks as it trades near $4,347 on Friday. The metal rests directly on the neckline of a daily head-and-shoulders pattern, with a confirmed break potentially targeting $3,950, roughly 9% below the current price.
The August consumer price index (CPI) in the United States is expected to land on Friday morning, combining macro and technical factors. The producer price index rose 5.4% year over year against a 5.3% forecast, pushing gold below $4,400 and Treasury yields up to their highest level since October 2023.
The probability of a Federal Reserve hike next week has increased to 67.1%, from 61.2%. The energy-driven inflation has lifted nominal yields without producing a dovish Fed response, causing gold to absorb rate pressure while losing its hedge appeal.