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Gold rallied in the last few hours. At the moment of writing, it was traded at 1,814.81 level versus 1,800.19 today's low. XAU/USD registered a 0.92% growth from the daily low to 1,816.82 today's high.
Technically, the yellow metal reached a strong resistance level, so it remains to see how it will react. XAU/USD edged higher only because the Dollar Index plunged after Fed Chair Powell's statement. He said that the Federal Reserve could increase rates more if needed.
Gold rallies ahead of the US inflation data publication. As you already know, the CPI is expected to register a 0.4% growth in the last month, while the Core CPI could report a 0.5% growth. You should be careful at the time of these releases as the volatility is going to be huge. The price of gold could register sharp movements in both directions.
XAU/USD reached the confluence area formed at the intersection between 1,815.57 with the 150% Fibonacci line. As you can see on the H4 chart, the price of gold has found support on the median line of the Descending Pitchfork and around the 1,784.90 level. Its temporary correction ended and now it seems determined to jump higher.
Gold is used as a hedge against inflation. The current inflationary pressure could push the price higher. A valid breakout above the 1,815.57 and above the 150% line may signal an upside continuation.
Gold extended its growth after retesting the weekly pivot point (1,803.71) and the Descending Pitchfork's upper median line (uml). A minor consolidation above the 1,815.57 broken resistance could signal an upside continuation. If the price of gold continues to grow, the weekly R1 (1,824.77) is seen as the next upside target. 1,831.83 high could be used as an upside target as well.
The bias is bullish in the short term, so XAU/USD could extend its growth as long as it stays above the weekly pivot point (1,803.71).
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