Gold Stages Technical Bounce Ahead of CPI Release

The gold price has staged a technical bounce ahead of the Consumer Price Index (CPI) release, but the bias remains bearish due to the main trend being down. The retracement zone resistance is $4,489.87 to $4,538.77, and it forms a resistance cluster with the 200-day moving average at $4,538.38.

The midpoint for the $4,282.62 to $4,510.93 range is $4,396.78, which has been acting as resistance this week. The main range is formed by the $3,942.10 bottom and the $4,697.11 top, with its retracement zone being $4,319.60 to $4,230.51.

This zone provided support on September 2 when the market bottomed at $4,282.62, and today's low at $4,300.79 was inside this zone. The 50-day moving average at $4,269.02 sits inside the zone, solidifying its importance as a key support area.

The Consumer Price Index is set to be released at 12:30 GMT, which will be the last inflation report before the Fed meets on September 15-16. The bias leans bearish with the main trend down on the swing chart, and sellers have not been able to crack the retracement zone at $4,319.60 to $4,230.51.

A sustained break below the 50-day moving average changes the trend and opens up the possibility of a move to $4,230.51. On the other hand, a move through $4,510.93 flips the trend to up and puts the resistance cluster near the 200-day at $4,538.38 back in play.