Gold Prices Teeter on Breakout as US Inflation Data Looms
The upcoming US PPI and CPI reports are expected to have a significant impact on gold and silver prices. The strong inflation data may support rate hike expectations in September, leading to a decline in both metals. However, softer data could reduce rate hike expectations and help the recovery of metals. Additionally, tensions between the US and Iran may create safe-haven demand for gold and silver.
Gold prices have been consolidating in a range after the recent drop following strong jobs data last week. The daily chart shows that prices are stuck between the 50-day SMA and the 200-day SMA, ranging from $4,260 to $4,530. A break above or below this range will likely define the next move in gold.
A breakout above $4,530 could lead to a push toward $4,800, which is defined by the resistance of the trendline of the descending wedge. On the other hand, a break below $4,260 may open the way for a quick drop toward the $4,000 region.